House Asks Global Crossing for Details on Shredding (won't hear this on the evening news)

Reuters ^

[GulliverSwift]

House Asks Global Crossing for Details on Shredding Thu Jul 18, 7:15 PM ET

By Jeremy Pelofsky

WASHINGTON (Reuters) - The U.S. House Energy and Commerce Committee said on Thursday it has demanded information related to allegations that bankrupt telecommunications firm Global Crossing Ltd. shredded key documents.

The company has admitted that some documents have been shredded in several of its offices, but denied the documents were related to accounting practices and other issues under investigation by securities regulators.

The panel has been investigating certain contemporaneous swaps of capacity that were done during the first six months of 2001 by Global Crossing and now has turned its sights on the shredding accusations, according to a July 16 letter made available on Thursday.

"These allegations may impact the on-going investigation by this Committee since the Committee requested, in certain cases, documents of specific senior Global Crossing executives, as well as general categories of documents specifically related to the accounting treatment and business purpose of certain reciprocal transactions," the letter said.

A company spokeswoman was not immediately available for comment.

The shredding of documents was at the heart of the federal government's case against accounting firm Andersen, which was found guilty last month of obstructing justice in an investigation of its client, Enron Corp. Andersen audited the books of Enron and Global Crossing.

Global Crossing -- operator of a high-speed communications network that connects more than 200 cities in 27 countries -- filed in January for bankruptcy, buckling under $12.4 billion in debt, stiff competition and a capacity glut.

The Securities and Exchange Commission ( news - web sites) and the Federal Bureau of Investigation has been investigating the company for its accounting practices, allegedly engaging in network capacity swaps with other firms to inflate revenue.

The committee said it has interviewed several current and former company employees, including Joseph Perrone, the vice president of finance at the company who was allegedly involved in determining the accounting treatment for the swaps.

Subsequently, the panel asked for Perrone's files regarding the accounting treatment covering several years but only received 15 documents, "most of which are dated in late 1999," the letter said.

SHREDDING ALLEGATIONS

Global Crossing received a subpoena on Feb. 6 from the SEC and subsequently ordered employees in all of its offices worldwide to retain documents, but not all complied, according to court documents. A reminder was sent on June 17.

The company denied last month allegations of one employee who said she heard a shredding machine being used in a storage room in early February just before two employees left the room in the company's New Jersey headquarters.

The House committee noted that documents filed with the bankruptcy court overseeing Global Crossing's reorganization showed Perrone's administrative assistant and son-in-law were accused of being in the storage room where another employee heard a shredding machine being used.

The company did admit that documents unrelated to the investigation were shredded at its offices in Rochester, New York, Detroit, Montreal, Toronto and at a subsidiary based in Chelmsford, England.

The House panel demanded documents related to Global Crossing's document retention and destruction policy, the policy's author, whether Perrone's documents were destroyed and where shredders were located at the firm's headquarters.

The panel also asked for information about where executives had offices, where their files were kept, who had documents in the storage room in question, and whether the files have been removed.

Additionally, the congressional panel asked that several employees named in the February incident be made available for interview, including Perrone.

The revelations about shredding came last month after being brought to the attention of a bankruptcy court on June 10 by Ohio State Retirement Systems, which lost some $116 million when Global Crossing entered bankruptcy proceedings.

The committee asked the information be turned over by July 23.

[GulliverSwift]

The liberal media won't tell you about this. I've heard so many "funny" Enron shredding jokes that I would assume the liberal media would like to report this one too.

Of course, Enron is somewhat related to Bush, and Global Crossing is related to Terry Maucalif of the DNC. So of course they won't voluntarily report on this.

If ALL congressional Republicans could try to get in front of as many cameras and reporters as they can and harp about Global Crossing, as well as the SEC ANNOUNCING that this will be their number one case, then the media will have to do one of two things: They'll either report on Global Crossing, as well as on Terry Maucalife, or the media will be silenced and will decide that reporting on business scandals isn't an attractive fad anymore.

The media lusting after business scandals and the "shaky" economy (guess who makes it shaky, and tries to scare viewers on each report?) will be silenced when they find out they'll have to report on Global Crossing and it's shredding of documents.

If Republicans would focus on and call daily attention to Global Crossing, they wouldn't be dull-headed buffoons when it comes to public relations.

[Freee-dame]

silenced when they find out they'll have to report on Global Crossing and it's shredding of documents.

Have to? maybe one time on the radio news at 2 a.m. after which they can say that they reported it.

[Libloather]

Bump...

[LarryLied]

Shredding was brought up at the Senate hearings yesterday. The excuse was the material shredded was like, you know, not important like. The PRC/Drexel/Canadian bust out of Global Crossing:

http://www.freerepublic.com/focus/news/732403/posts

[timydnuc]

Oh come now people, when do we expect a socialist/propaganda/arm of the DNC to report the truth....It ain't gonna happen!

The "truth" died the same day Kennedy did...."What's the frequency Kenneth"?

The trouble with this filth is that we now have a truth machine called the internet, and it's becoming full of people that think and analize more than the lazy propagandists with thier lies. We can dispell a media lie faster than Bill Clinton can, "drop trou". Now ain't that something. The glass, my friends, is half full!

Take the country back....and do it "for the children"!