O'REILLY TRANSCRIPT: Why Won't the Justice Dept. Prosecute Gary Winnick?

This is a partial transcript from The O'Reilly Factor, January 8, 2003. Click (web site) to order the complete transcript.

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BILL O'REILLY, HOST: In the Unresolved Problems segment tonight, the federal government will not bring charges against Global Crossing Chairman Gary Winnick.

On Christmas Eve, Attorney General Ashcroft announced no indictment would be forthcoming. Mr. Ashcroft timed the announcement so few would see or hear it. That's because Winnick is a genuine villain, in my opinion, and most people know it.

He lives on a $100-million estate in Bel Air, California, after taking out $740 million from a company that went bankrupt after that. Winnick's house has 43 room, including 15 bedrooms and 17 baths. Winnick also reportedly owns two other houses in Malibu and another one in Brentwood, as well as yachts and everything else you would expect from a robber baron.

With all this money, Winnick is connected. He has played golf with Bill Clinton and DNC chief Terry McAuliffe. Somehow, after the putting was over, $1 million from Winnick found its way to the Clinton library, and McAuliffe was given the opportunity to invest $100,000 in Global Crossing. He sold his stock for $18 million well before the crash.

In addition, Winnick hired George Bush senior to give a speech and paid him with stock. Mr. Bush cashed out for a reported $4-1/2 million.

With us now in the studio is former federal prosecutor Doug Burns and, from Los Angeles, Brian Lysaght, another former federal prosecutor, who has been closely following the Winnick case.

BRIAN LYSAGHT, ATTORNEY FOR WHISTLEBLOWER: I was shocked. We actually represent Roy Ellison, who's the whistleblower in Global Crossing, and we were expecting an indictment any time. It's just mindboggling.

O'REILLY: What did he do? Tell the folks and me and Mr. Burns what exactly did Winnick do.

LYSAGHT: Well, he cre -- he learned at the knee of Michael Milken. He probably was going to get indicted with Milken except probably turned states evidence when Giuliani indicted Milken.

He started this company, which never made a dime. He had personally made $740 million, as you've mentioned. All his cronies made many, many, many ten of millions of dollars more, and he absolutely crushed the shareholders and 401(k) participants.

And he did it by a very simple accounting fraud, which is known as either Lazy Susan trades or roundtable trades, but essentially illegal swaps.

And the day before the Ashcroft invest -- the Ashcroft announcement on December 24, there was a front-page article in The Wall Street Journal by Dennis Berman talking extensively about the evidence that these swaps were nothing more than pure unadulterated nonsense designed to boost revenues, and it was done across the telecommunications industry, across the Internet industry, and, indeed, across the energy industry by Enron itself.

O'REILLY: So the crime you say he committed is fraud. He basically was basically telling investors --

And I did have some Global Crossing stock, which is recommended by a -- excuse me -- a money manager named John Deschauer (ph), not only recommended but pounded on the table continually by Deschauer (ph), and I foolishly bought the stock.

So you're saying that Winnick all along knew that his company was a shell company, not able to earn legitimate money, and was moving things around to give the appearance of future profit?

LYSAGHT: Yes, especially in the 2000, 2001 time period. Once a fellow by the name of Joseph Pirone (ph), who was the Andersen account executive -- of course, Andersen was the auditors of Global Crossing, like everybody else -- he actually went from Andersen over to Global Crossing and, from our view, orchestrated this entire scam, and...

O'REILLY: All right. I'm going to get to Mr. Burns to reply in a minute, but one more question. Obviously, as we've pointed out -- excuse me again -- Winnick gave big money to important people.

O'REILLY: Bill Clinton, Terry McAuliffe, and George Bush the elder. All right. He gave them big money. There's no disputing that. Everybody knows that. Do you believe that influenced John Ashcroft not to indict him?

LYSAGHT: Well, I'm pretty sure -- it's actually about 55-45 Republicans and Democrats. Everybody has a little tar from that tar baby. But, as far as the indictment itself, it was pretty much handled by the local office out here.

LYSAGHT: Hope springs eternal that Ashcroft is going to change his mind, but I don't know if...

LYSAGHT: You know, I'm a former federal prosecutor. It's inconceivable to me that any prosecutor gets paid off, but it's also inconceivable to me that they're not indicting Winnick. That's just mindboggling.

O'REILLY: Well, why would Ashcroft make the announcement on Christmas Eve? Come on. You know the game.

DOUG BURNS, FORMER FEDERAL PROSECUTOR: I find this interesting because, normally, the complaint is that prosecutors are overzealous, OK, and, when they're in a high-publicity case against a high-publicity target, they want to put a notch on their belt because...

BURNS: But what's the complaint here, that they're underzealous? I mean, the point is we don't know...

O'REILLY: The complaint here is the fix might be in because this guy greased two presidents and the head of the DNC.

BURNS: Well, I think our other guest is very careful, obviously, not to, you know, agree with that type of allegation. That's very serious.

O'REILLY: Whoa, whoa, whoa. I'm not making any allegation. I want everybody to be clear. I'm giving you the facts. Big money flowed from Gary Winnick to three very powerful Americans. There's no question about that, all right?

O'REILLY: So you can draw your own conclusions of whether that helped him or not. But you -- are you sticking up for Winnick?

BURNS: Not at all. I'm telling you that federal prosecutors out there, who ordinarily would be quite zealous in this type of case -- I was in a case in Los Angeles myself with that office. They weren't cutting us a lot of slack. They were very aggressive, very competent. And the point I'm trying to make is that you've got to draw some conclusion that they had some problem with the evidence in the case.

BURNS: I'm not saying that at all. I mean, people confuse guilt and innocence on the one hand versus provability in court on the other.

Mr. Lysaght, is it possible that the U.S. attorney in Los Angeles couldn't get him because he was too smart and used the system to enrich himself and his buddies but didn't really violate any law?

LYSAGHT: No, you could take any one of your viewers off a truck he's driving and put him in as prosecuting this case, and it would be successful. There are e-mails all over the place showing that Winnick had blood on his hands in every single one of these transactions. An infant could try this case successfully.

Now, whether it is a crisis of timidity out here, I don't know. Maybe they think white-collar crime is a bank robbery with a videotape and a note. But this is -- this is actually not much more complicated than that, and this...

O'REILLY: And, of course, we never get an explanation from John Ashcroft's Justice Department, just as we never got an explanation from Janet Reno's Justice Department. The folks are blind when it comes to justice, which should be blind, but it isn't.

Now, Mr. Lysaght, is -- represents the whistleblower who presented the evidence against Gary Winnick. He says that Barney Fife could make this case. Do you doubt Mr. Lysaght?

BURNS: Well, obviously and unfortunately from his standpoint, there may be some problems with corroborating or backing up the information that was provided. Again, we don't have in front of us, Bill, the memorandum of interviews of witnesses, all of the...

BURNS: Right, but, again, it's kind of hard to criticize the prosecutorial decision, unless we know what specific information they're looking at, and, again, I want to reiterate that, you know, prosecutors in high-publicity cases -- they want to make the case.

O'REILLY: See, Mr. Burns, you're living in a land of oz because you're never going to get a Marc Rich pardon investigation -- indictment. You didn't get an indictment against Senator Robert Torricelli. You didn't get an indictment in the vote-buying-in-New-Square/Hillary Clinton case. The powerful protect each other.

Mr. Lysaght, do you see it that way? I believe that the powerful protect each other in this country and that that has something to do with this.

O'REILLY: OK. I mean, but, in this case, we have so much money taken out of a company that screwed so many working people with their pension plans and everything else, and it looks like Gary Winnick will stay atop his $100-million estate in Bel Air and suffer no consequences.

LYSAGHT: Yes. Like Jabba the Hutt up there looking down on the ashes that he's made of other people's lives.

BURNS: I think, again, we must sort out the difference between guilt and innocence and provability in court. Let's not walk out of this show saying he didn't do anything wrong. That's not the point.

Winnick is just the tip of the iceberg. What about the Klintons and their whole crew. No one went to jail for the F.B.I. files, no investigation into the pardons quid pro quo, no investigation into the deaths of James McDougal Clinton's convicted Whitewater partner died of an apparent heart attack, while in solitary confinement. He was a key witness in Ken Starr's investigation.
Mary Mahoney - A former White House intern was murdered July 1997 at a Starbucks Coffee Shop in Georgetown. The murder happened just after she was to go public with her story of sexual harassment in the White House.
-Vince Foster Former White House councelor, and colleague of Hillary Clinton at Little Rock's Rose law firm. Died of a gunshot wound to the head, ruled a suicide.
-Ron Brown Secretary of Commerce and former DNC Chairman. Reported to have died by impact in a plane crash. A pathologist close to the investi-gation reported that there was a hole in the top of Brown's skull resembling a gunshot wound. At the time of his death Brown was being investigated, and spoke publicly of his willingness to cut a deal with prosecutors.
-C. Victor Raiser II - & - Montgomery Raiser Major players in the Clinton fund raising organization died in a private plane crash in July 1992.
-Paul Tulley Democratic National Committee Political Director found dead in a hotel room in Little Rock, September 1992. Described by Clinton as a "Dear friend and trusted advisor".
-Ed Willey Clinton fund raiser, found dead November 1993 deep in the woods in Virginia of a gunshot wound to the head. Ruled a suicide. Ed Willey died on the same day his wife Kathleen Willey claimed Bill Clinton groped her in the oval office in the White House. Ed Willey was involved in several Clinton fund raising events.
-Jerry Parks Head of Clinton's gubernatorial security team in Little Rock. Gunned down in his car at a deserted intersection outside Little Rock. Park's son said his father was building a dossier on Clinton. He allegedly threatened to reveal this information. After he died the files were mysteriously removed from his house. -James Bunch Died from a gunshot suicide. It was reported that he had a "Black Book" of people containing names of influential people who visited prostitutes in Texas and Arkansas.
-James Wilson Was found dead in May 1993 from an apparent hanging suicide. He was reported to have ties to Whitewater.
-Kathy Ferguson Ex-wife of Arkansas Trooper Danny Ferguson died in May 1994 was found dead in her living room with a gunshot to her head. It was ruled a suicide even though there were several packed suitcases, as if she was going somewhere. Danny Ferguson was a co-defendant along with Bill Clinton in the Paula Jones lawsuit. Kathy Ferguson was a possible corroborating witness for Paula Jones.
-Bill Shelton Arkansas State Trooper and fiancee of Kathy Ferguson. Critical of the suicide ruling of his fiancee, he was found dead in June, 1994 of a gunshot wound also ruled a suicide at the gravesite of his fiancee.
-Gandy Baugh Attorney for Clinton friend Dan Lassater died by jumping out a window of a tall building January, 1994. His client was a convicted drug distributor.
-Florence Martin Accountant sub-contractor for the CIA related to the Barry Seal Mena Airport drug smuggling case. Died of three gunshot wounds.
-Suzanne Coleman Reportedly had an affair with Clinton when he was Arkansas Attorney General. Died of a gunshot wound to the back of the head, ruled a suicide. Was pregnant at the time of her death.
-Paula Grober Clinton's speech interpreter for the deaf from 1978 until her death December 9, 1992. She died in a one car accident.
-Danny Casolaro Investigative reporter. Investigating Mena Airport and Arkansas Development Finance Authority. He slit his wrists, apparent suicide in the middle of his investigation.
-Paul Wilcher Attorney investigating corruption at Mena Airport with Casolaro and the 1980 "October Surprise" was found dead on a toilet June 22, 1993 in his Washington DC apartment. Had delivered a report to Janet Reno 3 weeks before his death.
-Jon Parnell Walker Whitewater investigator for Resolution Trust Corp. Jumped to his death from his Arlington, Virginia apartment balcony August 15, 1993 Was investigating Morgan Guarantee scandal.
-Barbara Wise Commerce Department staffer. Worked closely with Ron Brown and John Huang. Cause of death unknown. Died November 29, 1996. Her bruised nude body was found locked in her office at the Department of Commerce.
-Charles Meissner Assistant Secretary of Commerce who gave John Huang special security clearance, died shortly thereafter in a small plane crash.
-Dr. Stanley Heard Chairman of the National Chiropractic Health Care Advisory Committee died with his attorney Steve Dickson in a small plane crash. Dr. Heard, in addition to serving on Clinton's advisory council personally treated Clinton's mother, stepfather and brother.
-Barry Seal Drug running pilot out of Mena Arkansas, Death was no accident.
-Johnny Lawhorn Jr. Mechanic, found a check made out to Clinton in the trunk of a car left in his repair shop. Died when his car hit a utility pole.
-Stanley Huggins Suicide. Investigated Madison Guarantee. His report was never released.
-Hershell Friday Attorney and Clinton fund raiser died March 1, 1994 when his plane exploded.

-Kevin Ives & Don Henry Known as "The boys on the track" case. Reports say the boys may have stumbled upon the Mena Arkansas airport drug operation. Controversial case where initial report of death was due to falling asleep on railroad track. Later reports claim the 2 boys had been slain before being placed on the tracks. Many linked to the case died before their testimony could come before a Grand Jury.

THE FOLLOWING SIX PERSONS HAD INFORMATION ON THE IVES/HENRY CASE:
- Keith Coney Died when his motorcycle slammed into the back of a truck July, 1988.
- Keith McMaskle Died, stabbed 113 times, Nov, 1988
- Gregory Collins Died from a gunshot wound January 1989.
-Jeff Rhodes He was shot, mutilated and found burned in a trash dump in April 1989.
-James Milan Found decapitated. Coroner ruled death due to natural causes.
-Jordan Kettleson Was found shot to death in the front seat of his pickup truck in June 1990.
-Richard Winters Was a suspect in the Ives / Henry deaths. Was killed in a set-up robbery July 1989

THE FOLLOWING CLINTON BODYGUARDS ARE DEAD:
Major William S. Barkley Jr.
Captain Scott J. Reynolds
Sgt. Brian Hanley
Sgt. Tim Sabel
Major General William Robertson
Col. William Densberger
Col. Robert Kelly
Spec. Gary Rhodes
Steve Willis
Robert Williams
Conway LeBleu
Todd McKeehan

Heck the Klinons leave more dead bodies behind then a mortician. There is enough to make a mini-series for the next ten years...

This O'Reilly interview was not one of his best -- it's really incoherent. First, absence of criminal liability does not mean that one is free of CIVIL liability. Individual investors can sue Winnick for fraud - the legal elements required for proof are different than the criminal elements, as well as the levels and standards of proof (preponderance of the evidence versus beyond a reasonable doubt, majority of jury versus unanimous). Remember, OJ was not convicted criminally but he was convicted civilly, for example.

Also, selling stock in a failing company as CEO is not prima facie evidence of a crime -- i.e., selling as part of a regular pre-committed program of selling, in regular moderate amounts -- otherwise CEOs could NEVER sell their stock.

And the 'swaps' that Global Crossing did weren't prima facie "illegal", as the whistleblower-lawyer said, and that's a sloppy use of language -- the swaps were simply not legitimate as reportable profits from an accounting perspective -- but there is no bar to creating a contract where the exchange of consideration is goods-to-goods rather than $$. Now, Anderson should not have represented that contract as revenue, but that's another matter and Winnick may not have been a party to that decision or knowledgeable about its implications -- we just don't know.

And that's why prosecutors are required to use their discernment and discretion -- that's the only way the system can work. The alternative is to overcharge and then, when a not-guilty verdict is returned, "where does the defendant get his reputation back?"

So -- O'Reilly and his guest are being irresponsible, and the "former prosecutor" has it about right.

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