Another Cooked Goose Flying South
Sightings from The Catbird Seat
~ o ~
While the Enron failure was making headlines with Bush/Cheney refusing to turn over documents to the General Accounting Office, this tiny article was buried in the business section of a Gannett newspaper:
January 29, 2002
Global Crossing Files Bankruptcy
In one of the largest-ever corporate failures, telecommunications network builder Global Crossing Ltd. filed for bankruptcy protection yesterday. The New York Stock Exchange immediately halted trading in the Bermuda-based company, which spent billions building a worldwide fiber-optic network.
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March 25, 2003
PROBE SOUGHT OF PENTAGON ADVISER PERLE
By Jeremy Pelofsky
WASHINGTON, March 25 (Reuters) – A senior U.S. Democrat has called for an investigation of Richard Perle, an architect of the war on Iraq, for possible conflicts of interest in his roles as corporate adviser and Pentagon consultant.
Rep. John Conyers, the top Democrat on the House of Representatives Judiciary Committee, asked the Pentagon’s inspector general to probe Perle’s work as a paid adviser to bankrupt telecommunications company Global Crossing Ltd. and his guidance on investment opportunities resulting from the Iraq conflict.
“I am aware of several potential conflicts that warrant your immediate review,” Conyers said on Monday in a letter to the Defense Department’s inspector general, Joseph Schmitz. The letter was made available on Tuesday.
“Mr. Perle is considered a ‘special government employee’ and is subject to government ethics prohibition — both regulatory and criminal — on using public office for private gain,” Conyers’ letter said.
Perle did not return a call seeking comment on Tuesday but has said he has always followed ethics rules. A spokesman for the U.S. Defense Department declined to comment. Standard practice is for the inspector general to review such requests and determine whether an investigation is warranted.
“The president is confident that all laws will be followed by all people who are on all commissions,” White House spokesman Ari Fleischer said in response to a question about Perle at his daily news conference.
Perle chairs the Defense Policy Board, created in 2001 to advise the Pentagon, but has no official policymaking role and is not paid.
A leading Washington hawk *, he has played an influential role in developing the Bush administration’s blueprint for ousting Iraqi President Saddam Hussein.
Critics have questioned Perle’s activities when not advising Secretary of Defense Donald Rumsfeld.
GLOBAL CROSSING REVIEW
Perle signed on to help Global Crossing, a bankrupt operator of an international fiber-optic network, win U.S. approval to sell a 61.5 percent stake to Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte.
The plan has run into trouble with the Committee on Foreign Investment in the United States. Including Rumsfeld and other top national security officials, the panel can block mergers and acquisitions it feels could harm to U.S. interests.
Global Crossing began talks to restructure the deal after the committee raised concern that its network would be controlled by a company with strong ties to China. Hutchison is majority owned by Hong Kong’s richest man, Li Ka-shing.
Perle has said he would be paid $125,000 for his advice and another $600,000 if the government approves the deal.
An article in The New York Times cited a March 7 affidavit in which Perle discussed his “unique perspective” on national defense and security and said he had contacted a government official on Global Crossing’s behalf.
“The fact that Mr. Perle may be reconsidering filing the affidavit does not alter the existence of the alleged conflict,” Conyers said, citing the newspaper article.
Conyers also asked the Pentagon to probe reports that Perle participated in a conference call sponsored by Goldman Sachs * (GS) to discuss investment opportunities emerging from the war in Iraq and that he received stock options from a company doing business with the U.S. military.
“I would submit that it is a conflict of interest for a high-ranking government official to be proffering advice on how to profit from the war,” Conyers said.
A Goldman Sachs spokesman had no immediate comment.
Conyers also pointed out that Perle sits on the board of Autonomy Corp. , which lists the U.S. Army and military as customers, and received stock options.
© 2003 Reuters
* For more on the “hawks”, GO TO > > > Condoleezza & The Chicken Hawks
* For more on Goldman Sachs, GO TO > > > Dirty Gold in Goldman Sachs
* * *
January 31, 2002
Global’s Accounting Challenged
The Washington Post
A finance executive at bankrupt telecom giant Global Crossing warned the firm’s top lawyer last August that the company’s financial condition was being covered up with misleading and suspect accounting techniques, the company said, confirming a report in the Los Angeles Times.
The five-page letter was written by Roy Olofson, vice president of finance. He alleged that the company and its auditor – Arthur Andersen, the firm under fire for its work at Enron – inflated revenue and cash-flow figures.
Global Crossing filed for Chapter 11 protection earlier this week in the fifth-largest bankruptcy case in U.S. history.
The company, through an outside lawyer, denied Olofson’s accusations and called him “a disgruntled employee who wanted us to pay him money in exchange for not disclosing things.”
* * *
February 2, 2002
Trend is toward more lavish packages for executives
By Liz Pulliam Weston, Los Angeles Times
The lavish retirement plans, low-interest loans and other perquisites showered on Enron Corp. managers have put a spotlight on a growing corporate trend – one of ever-richer executive benefits packages whose costs often can be hidden from shareholders.
Compensation experts say companies increasingly are using executives’ benefits packages, which already are far more generous than those offered to regular workers, as a way to quietly beef up total pay for top managers regardless of how their company performs.
Sumptuous paychecks for executives are nothing new. But shareholder activists say weak regulatory requirements, along with a faltering stock market, are leading to unchecked growth in executive retirement plans and other benefits even as regular workers face losses and cutbacks in their own plans.
“The trend has been for executives to be greedier and greedier, even though there’s a recession,” said Cynthia Richson, director of corporate governance for the State of Wisconsin Investment Board. . . .
HUGE LOW-COST LOANS
SEC filings show telecom company Global Crossing Ltd., which filed for bankruptcy protection this week, made an $8 million loan to Chief Executive Thomas Casey in November 2000 and a $1.8 million loan to President David Walsh in March 2001.
Both loans were secured by the executives’ homes, but the interest rates they paid – 6.01 percent for Casey, 4.75 percent for Walsh – were 3 to 4 percentage points below prevailing rates on standard home equity loans. . . .
* * *
March 7, 2002
Global Crossing Buyout by Li Ka-Shing Under Fire
By Charles R. Smith
Chinese Billionaire Tied to the Chinese Army
Li Ka-Shing’s ties to the Chinese army has Global Crossing shareholders and Congress crying foul.
In February Li, a Chinese billionaire, put together a $750 million offer to buy out the bankrupt telecom giant Global Crossing. However, the plan by the close associate of Chinese President Jiang Zemin has come under fire from inside Congress and from Global Crossing’s creditors.
Li faces competitive bids for Global Crossing made by AT&T and New York-based KAB Group LLC, which has filed an alternative plan on behalf of the shareholders that proposes to raise $5.5 billion over the next three years.
However, the financial competition over Global Crossing is now being overshadowed by the U.S. national security concerns posed by the sale to the Chinese billionaire.
Rep. Dana Rohrabacher, R-Calif., sent an urgent letter Monday to Defense Secretary Donald Rumsfeld, expressing his opposition to the proposed sale of the telecom giant to Li and seeking a “full investigation” by the Defense Department into the sale.
‘National Security Nightmare’
The concern is that Global Crossing holds contracts over secure Defense Department communications and that the sale to the Chinese billionaire may compromise the U.S. military. Rep. Rohrabacher expressed his concern directly to Rumsfeld, noting that a U.S. military contract “under a company owned by Li Ka-Shing would be a national security nightmare.”
NewsMax.com has uncovered the documented close ties between Li and the Chinese military. One source on Capitol Hill compared Li’s relationship to the Chinese army as similar to that of billionaire Howard Hughes and the CIA. The fact is that Li is directly in business with the Chinese military.
He is a founder and board member of China International Trust and Investment Corp., or CITIC. A 1997 Rand Corp. report noted that CITIC acts as a front for the People’s Liberation Army.
“CITIC does enter into business partnerships with and provide logistical assistance to PLA and defense-industrial companies,” noted the 1997 Rand report.
“Poly Technologies, Ltd., was founded in 1984, ostensibly as a subsidiary of CITIC, although it was later exposed to be the primary commercial arm of the PLA General Staff Department’s Equipment Sub-Department. Throughout the 1980s, Poly sold hundreds of millions of dollars of largely surplus arms around the world, exporting to customers in Thailand, Burma, Iran, Pakistan, and the United States,” states the Rand report. . . .
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Editor’s note: Here is the text of Rep. Dana Rohrabacher’s letter to Defense Secretary Donald Rumsfeld.
March 4, 2002
The Honorable Donald H. Rumsfeld
Secretary of Defense
1000 Defense Pentagon
Washington, D.C. 20301
Dear Mr. Secretary:
I am writing to call your attention and express my opposition to the potential sale of the U.S. telecommunication company Global Crossing Ltd. to a consortium headed by the Hong Kong Chinese Hutchison Whampoa Ltd. American intelligence agencies have found that Hutchison Whampoa’s chairman Li Ka-shing has extensive ties to the Chinese Communist leadership and is a founder and Board member of China International Trust and Investment Corporation, which serves as a funding umbrella for the Chinese military. In addition, Li is reported to have been a close friend of General Ji Shengde, the former director of the PLA’s military intelligence bureau [See attached official and press documents].
Li, who is one of Beijing’s chief conduits in Hong Kong, has been involved in an anti-trust controversy in Hong Kong and widely-documented corruption in obtaining the lease of the strategic ports on the Panama Canal. Worldwide, Li and Hutchison have been involved in business practices that challenge American economic interests. Chinese military doctrine stresses information warfare and sabotage of communications systems as a key to successful assymetrical warfare against the United States. I request that the Department of Defense do a stringent review of this sale based on Li Ka-shing and Hutchison Whampoa’s relationship to the People’s Republic of China and on the national security ramifications for the United States.
According to the Global Crossing’s literature, the company provides integrated telecommunications services over the world’s most extensive global IP-based fiber-optic network. By mid-2001, the Global Crossing fiber-optic network covered 10,000 miles, reaching 27 countries throughout the Americas, Europe and the Asia-Pacific regions. Its Asian services are provided through its subsidiary, Asia Global Crossing. These networks are estimated to control over 15 percent of the fiber-optic network connecting the U.S. with Europe; 23 percent of the network with Asia, and 25 percent with South America.
Most significantly, the Global Crossing companies’ clients include the U.S. military, the Department of State and other U.S. government agencies. In addition, the U.S. military and other U.S. agencies, as well as NATO use the companies’ fiber-optic cables to conduct communications. In July, 2001, Global Crossing won a services contract from the Department of Defense to provide an advanced wide area network Internet service to the Defense Research and Engineering Network [DREN], which links more than 6,000 scientists and engineers at defense laboratories, test centers, universities and industry sites.
DREN has also been reported to potentially link every major U.S. military command, and would potentially risk the security of all “gatekeepers” of major U.S. national security communications networks. The DREN contract was recently reopened for bidding because of Global Crossing’s shortcomings. However, in the February 14, 2002, New York Times, Ms. Mary Moore, the spokeswoman for Global Crossing, said, “We think we are still in the running for this award.” Needless to say, that contract under a company owned by Li Ka-shing would be a national security nightmare.
The purchase of Global Crossing would enable Mr. Li, who has previously faced monopoly-related charges in Hong Kong, of manipulating the international market. And the ownership of Global Crossing would enable Hutchison and the Chinese to gain valuable insight and access to developments in the industry that could hinder competitiveness and cutting-edge leadership of U.S. companies in the international market. Above all other issues, I must underscore that a thorough investigation of this proposed sale is of utmost importance for U.S. national security.
I look forward to hearing from you to discuss a full investigation by the Department of Defense as soon as possible. In addition, I would like a copy, in classified and unclassified form, of a study written by SOUTHCOM during the period when Gen. Wesley Clark was the CINC, related to strategic threats to the United States in Latin America, including Hutchison control of the Panama Canal. The contact person in my Washington office, who is conducting a preliminary Congressional investigation on this matter, is Mr. Al Santoli. Please contact me through Mr. Santoli at 202-225-2415. Thank you for your consideration of this vital matter.
Member of Congress
cc: Hon. Condoleezza Rice, National Security Council
* * *
Reprinted from NewsMax.com:
February 16, 2002
Global Crossing Tied to Clinton Defense Secretary
By Wes Vernon, NewsMax.com
WASHINGTON — A top Clinton administration official, former Defense Secretary William Cohen, sits on the board of Global Crossing. This is the telecom giant that went belly up Jan. 28 in the fourth largest bankruptcy in U.S. history, leaving a trail of inflated revenues, top executives enriching themselves, employees and shareholders holding the bag, and Arthur Andersen acting as both consultant and auditor.
If this sounds familiar, it is because this is a replay of the Enron script. However, the Global Crossing scandal has direct political links, whereas unhappy Democrats have failed to find an improper Bush-Enron tie — though Bill Clinton pushed the economy-destroying Kyoto “global warming” treaty, rejected by the Senate 95-0, after Enron gave Democrats $420,000.
A Bigger Player Than Enron
Another curious fact revealed Friday, mentioned in passing by the Associated Press: Since 1999, when Global Crossing became a major campaign contributor, it has given nearly $3.5 million in political donations, more than the $2.9 million handed out by Enron and its executives in the same period. Of course, GC gave more to Democrats, so the media establishment isn’t raising a fuss.
The New York Times on Thursday casually dropped into the middle of a story focused mainly on the business side of Global Crossing’s problem the fact that “Global Crossing, which has tried to forge close ties with military organizations, appointed William S. Cohen, a secretary of defense in the Clinton administration, to its board last year.”
Radio talk show hosts have previously mentioned this, although up until now no one has given the Cohen connection much scrutiny.
Now comes a story by the Washington Dispatch, called to our attention by a NewsMax reader.
Though the New York Times says the Global Crossing problems “have delayed the awarding of a prestigious $450 million contract to provide the Defense Department with fast Internet services connecting laboratories and other research locations around the country,” the Dispatch spotlights the fact that the contract in question (sidetracked by the Bush Defense Department) “was initially approved under Clinton.”
Mentioned by the Dispatch, but only hinted at by the establishment New York Times, is that Cohen “could have been influential” in steering defense contracts to Global Crossing.
And the Associated Press reported Friday, “Even as Global’s stock price was hovering just above $1 a share in December, the company’s political action committee was giving $2,500 apiece to Democratic Sens. Tom Harkin of Iowa and Carl Levin of Michigan and $500 to Rep. Robert Ehrlich, R-Md.”
Significantly, Levin is chairman of the Senate Armed Services Committee, and Global Crossing was after that $450 million contract, “rescinded last year amid complaints from competitors that the company may lack the ability to provide secure and fast Internet services and, in any event, should be ineligible because it is based in Bermuda.”
That’s when GC hired a Washington law firm to lobby on defense issues and added Cohen to its board.
The New York Times fails to mention that Democrat National Chairman Terry McAuliffe made a profit of $18 million on an investment of $100,000 in Global Crossing.
This 18,000 percent killing on the market has raised suspicions of “insider training,” according to Judicial Watch, the public interest law firm, which has launched its own probe.
(It should also be noted that former President George H.W. Bush received a reported $80,000 worth of Global stock options for a speech he made in Tokyo in 1997, a pittance compared to the lecture fees paid to Clinton. At one point, that holding did swell up to $14.4 million, according to the Wall Street Journal, but it is not known whether Bush sold the stock.)
The Times does say “questions” have been raised by a proposal by Hutchison Whampoa Ltd. of Hong Kong and a unit of Singapore Technologies to buy Global Crossing. However, the Old Gray Lady does not mention Hutchison Whampoa’s connection to the communist Chinese army.
As reported earlier by NewsMax.com, the CEO of Hutchison, which controls commerce at both ends of the Panama Canal, is part of the “inner circle”” of the Chinese regime. Rep. Dana Rohrabacher, R-Calif., told NewsMax he is protesting the sale.
Clinton, McAuliffe, Cohen; now Reno, Bingaman
The Dispatch and the Associated Press reported that Global Crossing paid a whopping $2.5 million lobbying fee in cash and stock options to Anne Bingaman, former Reno Justice Department lawyer, and wife of Sen. Jeff Bingaman, D-N.M.
When she sold most of her GC stock in January 2000, she posted a profit of more than $1 million, according to her husband’s financial disclosure report.
This flies in the face of then-President Clinton’s vow that his White House would be “the most ethical administration in history” and discourage the revolving-door process. But since Clinton himself did not take his own rhetoric seriously, Mrs. Bingman might have reasoned that neither should she feel bound by it.
In his previous incarnation, Cohen was a Republican senator from Maine. He was a prominent RINO (Republican in Name Only). You may recall that he was very self-righteous during the Iran-Contra hearings and mugged for the cameras right along with his Democrat colleagues who tried, without success, to do in the Reagan administration.
McCain the ‘Reformer’ Caught
Another RINO, the anti-Bush Sen. John McCain of Arizona, is the No. 1 congressional beneficiary of Global Crossing.
Mr. Campaign Finance “Reform” snapped up $31,000 from Global Crossing employees for his failed presidential campaign in March 1999, AP reported Friday. “That same month, McCain, at the company’s urging, asked the Federal Communications Commission to encourage the development of undersea cables for transmitting telecommunications signals.”
McCain, crowing over the House’s passage of unconstitutional campaign finance “reform” legislation, did not respond to AP’s requests for an interview.
The NBC-Olympics Connection
Oh, yes and one more thing about the mainstream media’s ignoring or soft-pedaling the Global Crossing scandal: The Dispatch mentions that NBC had announced it had contracted with Global Crossing to transport video feeds from the Winter Olympics in Salt Lake City to seven stations around the country.
NBC announced the selection of Global Crossing several days after the company’s bankruptcy.
Nothing wrong or improper about that. But does anyone recall NBC giving the Global Crossing scandal anywhere near the coverage it has given the Enron uproar?
* * *
Reprinted from NewsMax.com
February 13, 2002
Media Avoid Global Crossing’s Scandal
By Christine Hall, CNSNews.com
CNSNews.com — In the wake of Enron’s scandalous financial collapse, the media are failing to scrutinize the connection between another business scandal and a prominent Democrat, some media critics charge.
Democratic National Committee chairman and former Clinton fundraiser Terry McAuliffe made a huge profit out of an investment in Global Crossing, the recently bankrupt telecom giant that, like Enron, is embroiled in an accounting scandal.
Like the Enron situation, the Global Crossing fiasco involved accounting services provided by Arthur Andersen and big losses in retirement savings on the part of company employees.
McAuliffe turned a $100,000 investment in 1997 into $18 million just two years later. He also facilitated a relationship between Global Crossing chief Gary Winnick and McAuliffe’s boss at that time, Bill Clinton.
It was a fruitful meeting, later resulting in a $1 million contribution to the Clinton presidential library.
The company donated to both major political parties, with just over half of its contributions sent to Democrats.
“There’s been no scrutiny of Terry McAuliffe and Global Crossing,” lamented Fox News’ Sean Hannity on Friday.
“I have found that politically we don’t see any call for [former Clinton Treasury Secretary] Robert Rubin, who lobbied the Treasury Department [on behalf of Enron]; no committee has called him to testify. No scrutiny of the Clinton years where there were very close ties to Enron in that case.”
L. Brent Bozell, president of the Media Research Center (parent organization of CNSNews.com), believes media bias is at work.
“Global Crossing is a scandal that directly implicates Democratic Party leaders, so once again, it’s buried,” wrote Bozell in a column Friday. Bozell noted that major new magazines such as Time, Newsweek and U.S. News and World Report, and the big three television networks either failed to cover the fourth largest bankruptcy in U.S. history or else failed to mention the McAuliffe connection.
Following Global Crossing’s declared bankruptcy in late January, the New York Times mentioned the connection in a Jan. 29 article but not in a lengthy piece in Monday’s edition. The Washington Post has mentioned the McAuliffe angle in two articles so far, neither of them on the front page.
But Howard Kurtz, media critic for the Washington Post, says media bias is not the reason for the lack of coverage of Global Crossing.
“I think it’s fair to say that McAuliffe’s situation has not gotten as much attention as Enron,” said Kurtz. “That may be in part because McAuliffe’s sweetheart deal had been previously reported. And he sold his stock three years ago and, therefore, can’t be implicated in Global Crossing’s collapse.
“Since we have trouble walking and chewing gum at the same time, maybe journalists were so wrapped up in the Enron story that Global Crossing was accorded secondary status.
“I do think McAuliffe’s role deserves more attention and investigation from the press,” said Kurtz. “I suspect that the media are going to be doing a lot more on Global Crossing,” especially now that the SEC will be investigating the company and its accounting services.
* * *
September 10, 2002
Lawmakers Get Grubman E-mail
Noelle Knox, USA TODAY
NEW YORK — Salomon Smith Barney on Monday turned over to a congressional committee copies of e-mail and correspondence between the firm’s former telecom analyst, Jack Grubman, and executives at Global Crossing.
The House Financial Services Committee has initiated a broad investigation into conflicts of interest on Wall Street and has requested similar documents from Goldman Sachs and Credit Suisse First Boston. The committee also wants to know if the firms doled out shares in hot new Internet companies as a way to attract investment-banking business.
During the Internet boom, stock in initial public offerings often shot through the roof in the first days of trading, allowing early shareholders to turn a quick profit.
Salomon, a division of Citigroup, has already handed over its records about IPO shares the firm sold to executives and directors at WorldCom.
WorldCom and Global Crossing, which are operating under bankruptcy-court protection, are being investigated by the Justice Department.
Salomon is expected to produce the documents pertaining to the IPO shares received by Global Crossing executives but only after the committee issues a subpoena. Salomon has maintained that it can’t hand over the information without a subpoena because of client confidentiality laws.
Nevertheless, the congressional investigation still presents a formidable challenge for Charles Prince, 52, who was named to head Salomon on Sunday. Prince replaces Michael Carpenter, who will oversee Citigroup’s investment portfolio.
With all of Salomon’s regulatory and legal issues — the firm also is being sued for some of its dealings with fallen energy giant Enron — an executive like Prince makes sense, industry analysts say. Prince was Citigroup’s general counsel and most recently its chief operating officer.
Robert Rubin, former Treasury secretary and the current chairman of the executive committee for Citigroup’s board, will also be more involved in running Salomon.
In announcing the management shakeup, Citigroup Chairman Sandy Weill said, ”As a result of recent events, we have recognized that we need to re-examine our business practices and make appropriate changes. There are certain industry practices that we should all be concerned about, and although we have found nothing illegal, looking back, we can see that certain of our activities do not reflect the way we believe business should be done. That should never be the case, and I am sorry for that.”
Grubman quit Salomon last month, saying he couldn’t work in the ”current climate of criticism.” . . .
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< < < FLASHBACK < < <
March 19, 1999
Bush: Read my stock tips …
Former president joins telecom elite as speech reaps $14 Million bonanza
LONDON – Former U.S. President George Bush has made one of the most lucrative speeches in history. Bush was able to net a fortune after he agreed to take shares in the fast-growing telecom firm Global Crossing in lieu of his $80,000 fee, according to a newspaper report Friday.
The Wall Street Journal reported that Global Crossing (GBLX) Chairman Lodwrick Cook invited Bush to make a presentation in Japan last year, before the company began trading on Nasdaq. Bush even cut 20 percent from his normal fee in testimony to his friendship with Cook.
Bush made the speech and pocketed the low-priced shares ahead of Global Crossing’s float last August.
The stock since has soared from its launch price of 9.5 to a high of 60. Following a two-for-one stock split, the shares closed at 48 Thursday.
Bermuda-based Global Crossing, which is building a fiber-optic network that will circle the globe, will see its market capitalization climb to $30 billion if this week’s acquisition of Rochester, N.Y.-based Frontier Corp. (FRO), a local and long-distance operator, goes through.
Bush’s opportunism makes him leader of the global league of political speechmakers.
Margaret Thatcher, the former U.K. prime minister, can claim only $150,000 per speech.
* * *
March 5, 2001
Global Crossing may be an upstart in the wireless business,
but its top three executives are old hands
when it comes to campaign contributions.
by Michael Scherer
Lodwrick Cook (Bush Contributor No. 85, $361,500) makes no secret about it: He is a man of influence.
“If we’re going to compete,” the co-chairman of telecommunications giant Global Crossing told reporters, “we’ve got to be heard.”
Based in Bermuda and Beverly Hills, the company has interests in everything from undersea fiber-optic cables to wireless frequencies. “I don’t apologize for access,” Cook says.
And access he has. Since the company was founded in 1997, Cook has led Global Crossing’s storm on Washington, hosting fundraisers for key members of Congress and joining other executives in contributing six-figure sums to both parties.
In exchange, politicians have bent over backward to help the upstart firm, speeding approval of its under-sea cables and pushing to hand over valuable wireless frequencies that would benefit the company.
Such wheeling and dealing typifies the telecommunications industry, which contributed more than $34.8 million to candidates and their parties in the last election, five times more than a decade earlier. With Bush appointees moving into the Federal Communications Commission and the Department of Justice, insiders expect that investment to pay off in relaxed regulation.
“A Bush presidency is not likely to repeat the sins of the past,” concludes a report by Dataquest, a leading industry research firm. Instead, the report states, the White House will cut oversight of the industry and be “less restrictive on how this market develops than the previous administration.”
Thanks to its generous contributions, Global Crossing is well positioned to take advantage of the shift. In addition to Cook, two other top executives handed out large donations: founder and chairman Gary Winnick (No. 84, $363,750) and former CEO Leo Hindery Jr. (No. 29, $591,902), who now heads Global Crossing’s Internet division.
At the Republican National Convention in August, the company spent $250,000 sponsoring fundraisers, including a “Carnevale Italiano” that saluted Italian-American Republicans.
The company already enjoys considerable clout in Washington. When competitors like AT&T and MCI WorldCom formed a cable consortium in 1999, Global Crossing spent a reported $3 million successfully lobbying for a federal investigation of the group. Fearing probes conducted by the FCC and Justice Department, the consortium scaled back its plans to join forces. Cook announced that Global Crossing was “pleased” with the outcome.
The following year, the company convinced the FCC to streamline the permit process for laying undersea fiber-optic cable, the company’s central business. Global Crossing’s lobbying effort got a boost from someone best known for crusading against the corrupting influence of campaign finance: Senator John McCain.
In March 1999, McCain wrote a letter urging the FCC to encourage the development of the company’s cables. On the last day of that month, Cook, Winnick, and other donors with ties to Global Crossing gave at least $23,000 to McCain’s presidential campaign.
As the value of Global Crossing’s stock soared, the company has done its part to share the wealth with the politically connected. In 1998, Cook asked former President George Bush to speak at the announcement in Tokyo of Global Crossing’s pan-Pacific cable.
According to the Wall Street Journal, Winnick suggested that Bush take his $80,000 speaking fee in the form of company stock. Just over a year later, that stock was worth $14.4 million.
Senator Robert Torricelli (D-N.J.) also bought Global Crossing stock — even as he filed a court brief supporting a bid by the company to control some $8 billion in wireless frequencies held by a bankrupt firm called NextWave Telecom.
The FCC wants to put the prized frequencies up for auction, but as an investor in NextWave, Global Crossing is trying to claim the air-space without having to bid against rivals like AT&T and Sprint.
That battle over frequency rights has provided the company with another valuable link to the Bush administration. With Global Crossing’s backing, NextWave Telecom is represented in its bankruptcy case by Washington attorney Theodore Olson.
In December, Olson appeared before the U.S. Supreme Court, where as Bush’s lead counsel he helped put the candidate in the White House.
* * *
July 10, 2001
Global Crossing Nabs $137 Million DoD Contract
By Roy Mark
Global Crossing Ltd.’s Government Markets unit has won a $137 million contract to provide advanced wide area network services to the U.S. Department of Defense (DoD).
The contract, for the DoD’s Defense Research and Engineering Network, has a three-year base with seven one-year options and has the potential to exceed $400 million over the contract life.
The Defense Research and Engineering Network is the Department of Defense’s premiere long-haul communication service provider for the agency’s High Performance Computing Modernization Program.
Global Crossing, which has headquarters in Hamilton, Bermuda, will design, develop and manage a secure, virtual private network. Users of the network will be able to communicate and collaborate in real time throughout the United States, Puerto Rico, Guam and other U.S. territories.
Global Crossing said it will link more than 6,000 scientists and engineers at defense laboratories, test centers, universities and industry sites via the largest, single, contiguous fiber-optic network in the world. Connectivity in the Asia-Pacific region will be provided by Global Crossing’s affiliate, Asia Global Crossing.
The company operates a fiber-optic network connecting 200 major cities in 27 countries in Asia, the Americas, and Europe, and it is building an extension to the network in Asia.
Global Crossing provides local, long-distance and international voice service; Internet access; data transport; and network capacity.
* * *
Overcapacity Puts Squeeze On Network Wholesalers
This article first appeared in PBI Media’s Fiber Optics News
By Fred Donovan
WASHINGTON–Carriers that specialize in selling wholesale capacity are in for a bumpy ride because of overcapacity in deployed fiber optics networks. So concluded a panel of telecom executives participating in the Global Traffic Meeting (GTM) held here last week.
Although the GTM was not open to the public, a group of executives from major carriers shared their views of the international marketplace during a “telecom summit” held in conjunction with the meeting.
“Network capacity goes in cycles,” observed Francis Kretz, France Telecom [FTE] executive vice president for long distance marketing and sales. “Right now, there is overcapacity. The price for bandwidth is going way down. But this will change in a year or two, when new applications generate greater demand.” . . .
James P. Martino, Bermuda-based Global Crossing’s [GX] vice president for global cost of access, said the drop in prices the company is seeing in its wholesale business is pushing it to target the retail multinational corporate market. Global Crossing has deployed a global fiber optic network that links 200 cities in 20 countries, he explained.
By targeting retail customers and using its own network, Global Crossing is pushing up profit margins, he said. In this market, Global Crossing is competing head on with the likes of AT&T [T], WorldCom [WCOM], Level 3 [LVLT], and 360networks [TSIX], he said….
Depressing Telecom Story
William Kennard, former chairman of the FEDERAL COMMUNICATIONS COMMISSION and, currently, the managing director of the Washington-based Carlyle Group’s telecom and media practice, observed that there is a “depression” in the telecom market. “The irrational exuberance has been replaced by an irrational pessimism,” he said.
Kennard said that there is consensus among political leaders around the world that it’s best to have open, privatized telecom markets in order to give consumers access to the Internet.
In the last few years, over 100 countries have created independent telecom regulators modeled after the FCC, he said.
“Everybody wants to be on board this new economy bandwagon,” he said.
He estimated that up to 50 percent of U.S. households would have broadband services by 2005.
Kennard challenged the conventional wisdom that the competitive local exchange carrier model is a “failed model.” There have been problems of “execution and implementation,” he said, but there still is demand that CLECs can tap into.
“We are seeing Wall Street interest in businesses that are building networks to maximize revenues per subscriber and moving into the enterprise space,” he said. “Those businesses will survive.”
He criticized the fiber optics industry for focusing too much on the “next new technology.”
“This is the wrong way to approach the telecom marketplace,” he said, adding, “applications drive deployment, not the other way around.”
“The bandwidth technology is there. What we need are the applications that are going to drive demand in this space. The reality is, we haven’t discovered what the killer application is for broadband. The paradigm shift in broadband will only come from applications we can’t even envision today,” he said.
“Shift happens,” he added. . . .
For more on politics in fiber optics, GO TO > > > Predators in Paradise; Vultures in the Sandwich Isles
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And who are the TOP INSTITUTIONAL HOLDERS of GLOBAL CROSSING?
As of September 30, 2001:
1) Barclay’s (a top member of The Committee of 300 … along with George H.W. Bush)
2) Jennison Associates
4) Merrill Lynch
5) State Street Financial Advisors
6) Oppenheimer Funds
7) Mass. Financial
8) Smith Barney
9) Renaissance Technologies
10) Orbis Holdings
11) Wachoria Asset Mgmt
13) JP Morgan
14) National Asset Mgmt
15) Munder Capital
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And who were the TOP INSTITUTIONAL SELLERS of GLOBAL CROSSING stock?
For the Quarter ending September 30, 2001:
1) Bank of America
2) Smith Barney
3) J.P. Morgan
4) Vanguard Group
5) Jennison Associates
6) Putnam (Marsh & McLennan)
8) Texas Teachers Retirement System
9) Mass. Financial Services
10) Standard Life
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And who are the TOP BIRDS at GLOBAL CROSSING?
As of January 9, 2002:
Winnick, Gary, (53) Chairman of the Board
Mr. Winnick, founder of GCL, has been Chairman of the Board of GCL since March 1997. Mr. Winnick is the founder and has been the Chairman and Chief Executive Officer of Pacific Capital Group, Inc. (“PCG”), a leading merchant bank specializing in telecommunications, media and technology, which has a substantial equity investment in GCL, since 1985.
Cook, Lodwrick M., (72) Co-Chairman of the Board
Mr. Cook has been Co-Chairman of the Board of Global Crossing since April 1998 and Vice Chairman and Managing Director of Pacific Capital Group, Inc. (“PCG”), a leading merchant bank specializing in telecommunications, media and technology and having a substantial equity investment in Global Crossing, since 1997. He became Chairman of Global Marine Systems, a wholly owned subsidiary of Global Crossing, in July 1999 and Co- Chairman of Asia Global Crossing Ltd. in April 2000. Prior to joining PCG, Mr. Cook spent 39 years at Atlantic Richfield Co., last serving as Chairman and Chief Executive Officer from 1986 to 1995, when he became Chairman Emeritus. Mr. Cook is also a Director of Litex, Inc., 911 Notify and Asia Global Crossing Ltd.
Casey, Thomas J., (49) Vice Chairman of the Board
Mr. Casey has been Vice Chairman and a Director since December 1998, after having been appointed Managing Director of GCL in September 1998. Prior to joining GCL, Mr. Casey was co-head of Merrill Lynch & Co.’s Global Communications Investment Banking Group for three years. From 1990 to 1995, Mr. Casey was a partner and co-head of the telecommunications and media group of the law firm of Skadden, Arps, Slate, Meagher and Flom. Mr. Casey also serves as president of PCG.
Cohrs, Dan J., (48) Chief Financial Officer, Executive Vice President
Mr. Cohrs has been Senior Vice President and Chief Financial Officer of GCL since May 1998. From 1993 to 1998, Mr. Cohrs was affiliated with GTE Corporation, rising to the position of Vice President and Chief Planning and Development Officer in 1997.
Wagner, Dan, President of the European Operations
Previously, Mr. Wagner served as Global Crossing’s managing director for the UK, where he led an aggressive growth plan to strengthen the company’s position as a premier provider of business solutions to the media & entertainment sector, financial markets, government organizations and multinational corporations. Wagner joined Global Crossing as vice president of business integration for North America, following its acquisition of Frontier Communications in September 1999. He also served as vice president of business integration for Europe under former European president, Carl Grivner. At Frontier, he held several key management positions, including senior director of finance and integration, and vice president of service delivery.
Perrone, Joseph P., (52) Executive Vice President-Finance
Mr. Perrone became Senior Vice President, Finance, in May 2000. Prior thereto, Mr. Perrone had served as a senior partner in Arthur Andersen’s Communications, Media, and Entertainment Practice, having been a partner at Arthur Andersen since 1981.
Gorton, James C., (39) Executive Vice President, General Counsel
Mr. Gorton has been Senior Vice President and General Counsel of GCL since July 1998, and also served as Secretary of GCL from August 1998 through September 1999. From 1994 to 1998, Mr. Gorton was a partner in the New York law firm of Simpson Thacher & Bartlett.
Comparin, John L., (48) Executive Vice President of Human Resources
Mr. Comparin has been Senior Vice President, Human Resources of GCL since August 1999. Prior thereto, Mr. Comparin had been Senior Vice President–Human Resources of ALLTEL Corporation, an information technology company that provides wireline and wireless communications and information services.
Dawson, Jr., S. W., (55) Executive Vice President, Global Network
Mr. Dawson joined GCL in September 1997 and was appointed Chief Executive Officer, Atlantic Crossing Ltd. in August 1998. He joined Bell Laboratories in 1968 and subsequently became associated with AT&T Long Lines, where he was responsible for AT&T Packet Switched Services and Data Networking Services. At AT&T Submarine Systems, Inc., he had overall delivery responsibility for implementation of all submarine cable projects.
Higase, Ted, Executive Vice President of Carrier Sales
Mr. Higase previously served as president of carrier services at Asia Global Crossing (NYSE:AX), where he was responsible for corporate-wide sales and marketing….
Lockwood, Peg, Executive Vice President, Business Sales and Marketing
Ms. Lockwood previously served as the Senior Vice President, Multinational Corporation Sales, North America. She joined Global Crossing with twenty-four years of industry experience, most recently as managing partner at AT&T Solutions….
Cali, Jim, Senior Vice President, Product Management
Most recently, Mr. Cali was a Vice President at Qwest….
Santos, Jerry, Senior Vice President, Corporate Communications
Mr. Santos was previously vice president of worldwide public relations and communications with Concert Communications….
Cohen, Gary A., (44) President and Chief Operating Officer of Global Crossing Solutions
Mr. Cohen was appointed President and Chief Operating Officer of Global Crossing Solutions on January 1, 2001. Mr. Cohen became Chief Operating Officer in May 2000. From July 1999 until May 2000, Mr. Cohen was general manager of IBM Global Telecommunications Industry, International Business Machines, Inc.’s business in the telecommunications service provider, telecommunications equipment supplier, and broadband distribution industries worldwide…..
Annunziata, Robert, (52) Director
Mr. Annunziata, a Director of Global Crossing since March 1999, was Chief Executive Officer of Global Crossing from February 1999 through March 2000….
Attanasio, Mark, (43) Director
Mark Attanasio has been a Group Managing Director of Trust Company of the West, an independent trust company, since 1995. He is a member of the TCW Group, Inc.’s Board of Directors and oversees the firm’s investment management activities in below-investment-grade securities and special situations. Mr. Attanasio is also a director of TCW Asset Management Company, and is a member of the board of trustees of the Brown University Third Century Fund, which invests a portion of the University’s endowment. He also serves as a director of Asia Global Crossing Ltd.
Brownstein, Norman, (57) Director
Mr. Brownstein, a Director of Global Crossing since May 2000, is Chairman of the Board of the legal firm of Brownstein Hyatt & Farber, P.C., a position he has held since 1986. A member of the American College of Real Estate Lawyers, Mr. Brownstein primarily practices in the areas of real estate law and commercial transactions. Mr. Brownstein is a Presidential appointee of the U.S. Holocaust Memorial Council, a director of the National Jewish Center for Immunology and Respiratory Medicine, a Trustee of the Simon Wiesenthal Center, and a Vice President of the American Israel Public Affairs Committee. He also serves as a director of Wyndham International.
Clayton, Joseph P., (51) Director
Mr. Clayton has been a Director of GCL since September 1999. He has also served as President, Global Crossing North America since that time. Mr. Clayton was Vice-Chairman of GCL from September 1999 to March 2000. Prior to the Merger with Global Crossing, Mr. Clayton was Chief Executive Officer of Frontier since August 1997 having served as Frontier’s President and Chief Operating Officer from June 1997 to August 1997….
Cohen, William S., (60) Director
The Honorable William S. Cohen has been Chairman of the Board and Chief Executive Officer of The Cohen Group, a strategic business consulting firm, since January, 2001. Additionally, he is a co-director at Empower America, a prominent public policy advocacy group, as well as Chairman of the William S. Cohen Center for International Policy and Commerce at the University of Maine. From January 1997 through January 2001, he was Secretary of Defense in the Clinton Administration. Prior thereto, he was a three-term United States Senator after having served three terms in the U. S. House of Representatives. He authored or co-authored nine books during his Congressional career. He also serves on the Board of Directors of Cendant Corporation and Asia Global Crossing Ltd.
Conway, Jr., William E., (51) Director
Mr. Conway, a Director of Global Crossing since August 1998, has been a managing director of The Carlyle Group, a private global investment firm, since 1987. Prior thereto, Mr. Conway had been Senior Vice President and Chief Financial Officer of MCI Communications Corporation. Mr. Conway also serves as director of Nextel Communications, Inc.
Hippeau, Eric, (49) Director
Mr. Hippeau, a Director of Global Crossing since September 1999, has been President and Executive Managing Director of Softbank International Ventures since mid-2000. Prior thereto, he was Chairman and Chief Executive Officer of Ziff-Davis Inc. from December 1993. He is also a director of CNET, Yahoo!, Inc., Electron Economy, diamonds.com, Starwood Hotels and Resorts Worldwide, Inc. and Asia Global Crossing Ltd.
Kent, Geoffrey J., (58) Director
Mr. Kent, a Director of Global Crossing since August 1998, is Chairman and Chief Executive Officer of the Abercrombie & Kent group of companies in the travel-related services industry, and has been associated with these companies since 1967.
Lagomasino, Maria E., (52) Director
As co-head of the JP Morgan Private Bank, Maria Elena Lagomasino oversees one of the largest providers of wealth management services worldwide. Lagomasino joined The Chase Manhattan Bank in 1983 and was appointed Global Private Bank Executive in November 1997. Ms. Lagomasino also serves on the boards of directors of Philips-Van Heusen Corporation, Avon Products, Inc. and Asia Global Crossing Ltd. and is on the board of trustees of the Synergos Institute. Ms. Lagomasino is a member of The Committee of 200.….
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December 4, 2001
Global Crossing Managed IP Network Helps Royal Mail Get Sorted
1. $33 million managed services contract with Lockheed Martin
2. Provides a managed networked solution linking 73 mail centres
LONDON – Global Crossing Ltd. (NYSE: GX) has begun the implementation of a fully managed wide area network for the Royal Mail in the UK under a contract with Lockheed Martin Integrated Systems worth an estimated US$33 million.
Royal Mail is the nationwide postal service operated by holding company Consignia. . . .
John Legere, Global Crossing Chief Executive Officer, said: “In many respects, Global Crossing is the perfect partner for this major infrastructure project. In the UK, our 8,000km broadband network is structured around the railways and closely maps the location of most mail sorting depots which are sited near railway stations for historical logistics reasons….
FOR MORE COOKED GEESE AT THE GLOBAL CROSSING,
FLY SOUTH TO
BIRDS THAT DRINK FROM CESSPOOLS
CONDOLEEZZA AND THE CHICKEN HAWKS
DIRTY GOLD IN GOLDMAN SACHS
GOING ‘POSTAL’ AT CONSIGNIA
NESTS ALONG WALL STREET
NESTS IN THE PENTAGON
P-S-S-T, WANNA BUY A GOOD AUDIT?
VULTURES OF THE SANDWICH ISLES
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MORE OF THE CATBIRD’S FAVORITE LINKS
THE CATBIRD SEAT FORUM
THE CATBIRD SEAT
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Last Update March 26, 2003 by The Catbird