Skip to comments.Did Daschle do anything for Leo Hindery when he was a Senator?
Posted on 01/31/2009 6:40:14 PM PST by airedale
Tom Daschle earned over $2,000,000 in consulting fees from Leo Hendery's firm over the last couple of years. I was wondering if Tom Daschle had anything to do with legislation that would have helped Mr. Hindery or his firms when Sen. Daschle was the Majority Leader, Minority Leader or just a plain senator. That's a lot of dollars in a very short while for consulting even with Daschle's connections to the Democratic power brokers in the House and Senate. Of course fund managers had a lot of cash to toss around a few years ago and a couple of mil was pocket change to a lot of them. I haven't seen any reporting on the nature of their relationship other than they were "friends" and Hindery was a Democratic activist, philanthropist and considered to head up the DNC as a replacement for Terry McAuliffe.
According to Wikipedia he headed Tele-Communications Inc before it merged with AT&T then became the head of AT&T Broadband and briefly CEO of Global Crossings (it says the problems occurred after he left but doesn't give info on why his term there was short). Hindery was suggested according to Wikipedia as a possible replacement for Bill Richardson in the Obama cabinet.
Global Crossings was involved in some sort of scandal during the Clinton administration.
The details elude me.
But if I were digging, I’d start there.
Odd how the MSM can’t “understand” anything negative about any dem. It’s all too complicated when a dem’s a crook...,
I remember Terry McAuliffe got $18 million from a very small investment in Global Crossings, and I think he used some of it to “lend” the Clintons money for their NY home.
Wikipedia entry for Hindery says that those problems at Global Crossings occurred after he left. That’s not exactly accurate since the class action results mentioned below cover the period from 1999 to the bankruptcy.
I checked the Wikipedia entry for Global Crossings just now and it contains the following info:
“Global Crossing was founded by Gary Winnick and three business associates in 1997 through Pacific Capital Group, Winnick’s personal venture group, which had experienced mixed results in its twelve-year history. From 1997 until 2002, Winnick held the title of chairman; Lodwrick Cook, former CEO of Atlantic Richfield Company (ARCO), was hired by Winnick in 1998 as co-chairman. John Scanlon became Global Crossing’s first chief executive officer the same year. In what would become a trend with Global Crossing’s chief executives, Scanlon’s leadership was short-lived, and in February 1999, he was replaced by Robert Annunziata, who had resigned his position as president of AT&T’s business services group to “build a company from start to finish.” Annunziata oversaw the rapid expansion of the company, including the purchase of Frontier Corp. at a cost of $11.2 billion and the $850 million purchase of Global Marine. After only a year though, in March, 2000, Annunziata resigned. During his time as CEO, Global Crossing had gone from a medium-sized company of about 150 employees to an international giant with over 14,000 employees. Taking over as CEO, Leo Hindery, another AT&T executive, had joined the company a few months earlier as head of its webhosting division, GlobalCenter. Hindery took the helm at a critical turning point for the company. In March, the month Hindery assumed command, Global Crossing’s stock had reached a high of $61 per share. A month later, however, the stock price had fallen to just $25 a share. The company’s filing for an offering of $2.5 billion in common and convertible preferred shares was cut in half. Many of the original investors bailed out at that time as well, cashing out most or all of their holdings for astounding gains. Gary Winnick, who continued with his company, himself made another $260 million at the April, 2000 stock offering. CEO Hindery projected the company would be cash-flow positive by early 2002, but two months later, in October, 2000, he quit, submitting his resignation after just seven months with the company. This took place after the sale of the GlobalCenter division to Exodus Communications, in a deal in which Hindery made $251 million. He was replaced by Thomas Casey, a forty-eight year old lawyer who came to Global Crossing from Merrill Lynch, where he was co-head of the global telecom investment banking group. Prior to that time, Casey had worked as an attorney for the Federal Communications Commission and the Department of Justice. Reports by individuals close to the company to the media suggested conflicts and power-struggles between Mr. Winnick and CEOs Annunziata and Hindery.”.....
....In June, 2001, Global Crossing completed its core network, spanning four continents, 27 countries and 200 major cities. The same month, it completed the sale of its local telephone-company business on June 29. Casey’s confidence in the company’s strength seemingly maintained that of many investment bankers and investors. Third-quarter filings for 2001, however, were considered disappointing, and Global Crossing announced plans to dispose of Global Marine. It was announced that Asia Global Crossing, of which Global Crossing owned fifty-nine percent, had entered discussions to merge in October 2001, after John Legere, Asia’s CEO, became head of both companies. The merger discussions ended in November 2001 and Legere was replaced as Asia Global Crossing CEO in January 2002 and was removed from the Asia Global Crossing board in April 2002.
By this time, the finance world was losing confidence rapidly, and Global Crossing’s stock price continued to fall, hitting five dollars a share by November, 2001. On December 20, it was revealed that Asia Global Crossing had requested $400 million from a credit line granted at its spinoff in 2000 by Global Crossing. Global Crossing refused to fund the line and a month later, in January, 2002, the company filed for Chapter 11 bankruptcy protection and its assets were ultimately sold to Asia Netcom, a subsidiary of China Netcom. At the same time, a letter of intent was filed by Global Crossing to sell control of the company, seventy-nine percent, to a joint venture between Hong Kong-based Hutchison Whampoa and Singapore Technologies Telemedia. Global Crossing’s bankruptcy filing listed total assets of $22.4 billion and debts amounting to $12.4 billion. If ranked by assets, Global Crossing’s bankruptcy is the seventh largest filing in American history......
....Global Crossing’s rapid rise and fall attracted tremendous attention and it was quickly revealed that the company, particularly its executives, lavishly spent money on “themselves and their digs.” Four of Global Crossing’s CEOs received at least $23 million in personal loans from the company, some of which were forgiven entirely even when bankruptcy was becoming a greater possibility. These same CEOs also received over $13.5 million in after-tax signing bonuses along with lucrative stock options. Between 1998 and 2001, Winnick sold approximately $420 million in Global Crossing stock. Other executives with the company sold an additional $900 million, totaling $1.3 billion, an amount equal to the Enron inside sales for the same period.....
....n 2004, Global Crossing settled a class action lawsuit over the losses the employees incurred from their pensions and 401Ks. Investors and former employees received $325 million in the settlement. Gary Winnick, the founder and former chairman of Global Crossing contributed $30 million to the settlement. Simpson Thacher & Bartlett, Global Crossing’s law firm, paid $19.5 million, even though the firm was not named as a defendant. The $30 million from Mr. Winnick is in addition to a $25 million fund he set up in December 2002 for Global Crossing employees who lost money investing in the retirement plan. Under the terms of the settlement, investors who bought Global Crossing securities beginning in 1999 received $245 million and former employees received $80 million. This amount was only a fraction of the losses the former employees incurred on their retirement plans. Mr. Winnick made $734 million selling his shares in Global Crossing before it collapsed. Some defendants named in the lawsuit did not participate in the settlement and will continue to litigate the case. Among them are Arthur Andersen, Global Crossing’s auditor; Salomon Smith Barney, J.P. Morgan, Goldman Sachs and other investment banks that sold Global Crossing securities; and Jack B. Grubman, the former Salomon Smith Barney telecommunications analyst. They have maintained that they did nothing wrong in their work related to Global Crossing.....”
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