Posted on 09/12/2002 6:28:29 PM PDT by Tumbleweed_Connection
The U.S. House Energy and Commerce Committee said on Thursday it had subpoenaed Global Crossing Chairman Gary Winnick to testify about deals that may have inflated revenue at Qwest Communications International Inc. .
"Based on our interviews, Mr. Winnick appears to have been a lot more involved in the day-to-day operations of the company than he has admitted," panel spokesman Ken Johnson told Reuters.
The committee has been investigating whether Global Crossing used contemporaneous deals for network capacity to inflate revenue and has expanded that probe to determine whether Qwest has made similar deals, Johnson said.
Rep. Billy Tauzin, the panel chairman and a Louisiana Republican, has scheduled a Sept. 24 hearing. Also subpoenaed to testify were Global Crossing General Counsel Jim Gorton and former executive vice president Greg Casey.
Additionally, the committee also has interviews scheduled for next week with former Qwest Chief Executive Officer Joseph Nacchio and former Chief Financial Officer Robin Szeliga, Johnson said.
Both Qwest and Global Crossing are being investigated by the Securities and Exchange Commission ( news - web sites) and other federal agencies for contemporaneous swaps of network capacity that may have inflated the companies' balance sheets.
Global Crossing filed for bankruptcy in January and recently agreed to sell a majority stake to two Asian companies. Qwest recently admitted that it misreported $1.6 billion in sales between 1999 and 2001.
Global Crossing operates a fiber-optic telecommunications network that connects more than 200 cities in 27 countries. Qwest is the dominant local telephone company in the western United States serving 14 states. WINNICK TO RESPOND
Winnick's lawyer said his client had received the subpoena and would respond. Winnick is also being investigated for stock sales that occurred around the time bad news emerged about the company's financial outlook.
"There is absolutely not a shred of evidence that Gary Winnick has done anything improper," said lawyer Gary Naftalis. "All records and reports demonstrate that Gary acted at all times legally, ethically and honorably."
The committee has investigated the collapse of Enron Corp. as well as ImClone Systems Inc. but in those instances officials called to testify invoked their constitutional right not to testify for fear of self-incrimination.
The panel's investigation has discovered that Global Crossing's Gorton had expressed concerns about the capacity swaps the company did, and Casey may have known about some alleged side deals that allowed for revenue from the deals to be recognized prematurely, Johnson said.
One confidential memo the committee released showed a discussion about recognizing revenue from a capacity swap with Qwest and the value of the deal. Johnson said it represented a side deal that would allow early recognition of revenue by Qwest.
"We believe Casey had intimate knowledge about several secret side deals that may have allowed Qwest to improperly recognize revenue," Johnson said.
Spokesmen for Qwest and Global Crossing were not immediately available for comment. The committee has already interviewed 18 current and former employees at Global Crossing and 12 at Qwest, Johnson said. (With additional reporting by Jessica Hall in Philadelphia)
Fox News reports two carloads of suspected terrorists stopped in Florida, by the way! They were showing aerial shots of the stop and said bomb-sniffing dogs had been called in. Let's be careful out there!
BWAHAHAHAHAHA...no Friend of Bill Clinton and Terry McAuliffe can be said to have acted honorably or else their life would be in imminent danger.
FReegards...MUD
As a former GX stockholder, you may have a very good Class Action Lawsuit against Winnick and McAuliffe, my FRiend.
FReegards...MUD
In the 16 September 2002 issue of National Review, Byron York has a story about Terry McAuliffe called "Like a Bandit." In it, he writes...
"National Review has learned that as part of the [House Energy and Commerce Committee] Global Crossing probe, investigators have looked into the relationship between Global Crossing and a now-bankrupt Syracuse, N.Y., telecom firm called Telergy. McAuliffe, a native of Syracuse who knew some of Telergy's executives, played a key role in bringing the two companies together. McAuliffe joined Telergy's board of directors in August 1999. The next month, Global Crossing invested $40 Million in Telergy. Telergy later reported that it paid McAuliffe $1.2 Million for "assisting us in raising equity capital." (That was not an insignificant amount; according to the SEC filing, $1.2 Million was roughly equal to the combined salaries and bonuses of Telergy's top three officers for that year.) At the same time, September 1999, Telergy and Global Crossing also entered into an arrangement known as an IRU. The acronym stands for "indefeasible right to use" and refers to the practice of capacity swaps, in which telecom firms trade access to one another's transmission lines. Global Crossing would later become notorious for counting capacity swaps, which are essentially barter deals, as revenue, an accounting device that made the company look more prosperous than it was. Now investigators want to find out whether Telergy, with McAuliffe on its board of directors, engaged in similar practices."
The Noose of Justice is tightening around the PUNK McAuliffe's pencil-neck!!
FReegards...MUD
FReegards...MUD
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