Posted on 08/30/2002 4:47:45 AM PDT by Libloather
Global Crossing's Winnick Is Tied to Swap
Fri Aug 30,12:15 AM ET
Gary Winnick, the founder and chairman of Global Crossing Ltd., played an active role in approving a swap of fiber-optic capacity that boosted the company's reported revenue seven weeks before he and other executives sold millions of dollars in stock, according to House Energy and Commerce Committee investigators, Friday's Wall Street Journal reported.
Mr. Winnick has maintained in the past few months that he played no role in day-to-day operations of the company even as Global Crossing's use of the swaps has sparked myriad investigations.
But according to documents and committee investigators, Mr. Winnick approved a transaction with 360Networks Inc. (Toronto: TSX.TO - News) on March 30, 2001 -- even after a board member and the company's general counsel objected to the deal in part because they were worried about 360Networks' "financial stability," according to a document provided by the committee. 360Networks, of Vancouver, British Columbia, later filed for Chapter 11 bankruptcy protection.
"I will tell you that there is absolutely zero evidence that Gary Winnick played any role in the 360 transaction other than to consider the transaction for a vote," said Ralph Ferrara, an attorney for Global Crossing. "There was an earnest discussion of the benefits and risks of going through the 360 deal." A spokesman for 360Networks declined to comment.
Still, the latest swap documents raise the stakes for Mr. Winnick, who has already come under criticism and scrutiny for selling $135 million in stock in May 2001, when Global Crossing's financial situation was faltering.
Global Crossing filed for Chapter 11 bankruptcy protection in January and was recently sold to Hong Kong's Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. for $250 million, a fraction of the $22 billion in assets Global Crossing listed when it filed for bankruptcy protection.
For the past six months, the House committee has been investigating the former telecom highflier for swaps, as well as looking at stock sales by senior executives. The committee is trying to determine whether Mr. Winnick engaged in any insider trading by boosting the company's revenue through swap transactions, which helped boost its stock, and then unloading his shares. The 360Networks deal, for instance, increased Global Crossing's cash revenue by $150 million.
Gary P. Naftalis, a lawyer for Mr. Winnick, said his client didn't engage in insider trading. "What he did was totally and completely proper, and there isn't a shred of evidence that he did anything wrong in connection with his trading."
In the months following Global Crossing's bankruptcy filing, scandals at WorldCom Inc., Tyco International Ltd., and Qwest Communications International Inc., have grabbed headlines. But both the Securities and Exchange Commission and congressional officials have been continuing their investigation of Global Crossing and, in particular, Mr. Winnick, who sold $735 million in Global stock.
Ken Johnson, a spokesman for the committee, said that the committee has been trying to interview Mr. Winnick, but that he refuses to talk about issues related to the investigation. Committee Chairman Billy Tauzin (R., La.) and committee members are now considering issuing a subpoena to compel him to talk, said Mr. Johnson.
-- Wall Street Journal staff reporters Deborah Solomon and Dennis Berman contributed to this article.
This is an "Enron" Rubin / "Global Crossing" McAuliffe thread - kind of a 'two for one' special. It's an attempt to keep track of some of the remaining corruption left over from the *Crinton administration that needs to be accounted for.
And, I might add, it's been slightly difficult to find ANY information on these two perps since the Lieberdood said he would call Rubin to testify and since McAuliffe opened his mouth a few weeks ago. I think Big Media is trying to lay low until after the election. (Shhhhhhhh...)
These companies overstated profits the IRS didn't overlook! By paying taxes on non-existent earnings the stockholders were supplementing the game. My question is rather than McAuliffe, is big government going to return false taxes to the shareholders?
When Enron story broke the press tried every day to connect GWB & his administration to it.....now they help the RATs cover up the Clinton cronies' connection!
Lineup for Sunday's TV News Shows
Sat Aug 31, 1:36 AM ET
By The Associated Press
Guest lineup for the Sunday TV news shows:
CBS' "Face the Nation" — Republican National Committee Chairman Marc Racicot; Democratic National Committee Chairman Terry McAuliffe.
The ultimate buttboy for the *Crintons, Lanny Davis, used to demand, "Poof! You can poove anything cause you don't have any poof!"
Since most greedy, leftist dirtbags are larger idiots than most, I'm sure there's gonna be plenty of poof.
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