lobal Crossing has acknowledged in discussions with lawyers for investors that documents were destroyed in its offices in Rochester, Montreal, Toronto and Minneapolis, after the company circulated an electronic message early in February explicitly telling employees not to shred any records, lawyers involved in the discussions said over the weekend. The message was sent several days after federal investigators requested documents from the company, which filed for bankruptcy protection in January.
These disclosures go beyond statements by a current and a former employee of Global Crossing, the troubled telecommunications company, that they had witnessed document shredding at the company's headquarters in Madison, N.J., after investigators began looking into its accounting practices earlier this year. The employees made their statements in sealed court filings that were opened late Friday.
Global Crossing said over the weekend that its own review had found only "isolated incidences of document disposal in the ordinary course of business." But, the company added, "None of the documents involved appear to have any relevance to pending litigation or governmental investigations."
Still, Ralph Ferrara, a lawyer at Debevoise & Plimpton, which represents Global Crossing, said yesterday he was not entirely certain that the destroyed documents were unrelated to the matters under investigation.
The employees said they witnessed documents being shredded in a storage room at the company's headquarters in February, according to a court filing by investigators for the Public Employees Retirement System of Ohio, a big institutional shareholder that has accused Global Crossing executives of misleading investors.
The employees said the documents were destroyed by workers with close ties to Joseph Perrone, executive vice president for finance at Global Crossing. Mr. Perrone's accounting strategies are at the center of investigations by the Securities and Exchange Commission, the F.B.I., a Congressional committee and a special committee formed by Global Crossing's board.
The company said on Feb. 4 that the S.E.C. had requested documents. The message telling employees not to destroy documents went out on Feb. 7.
The assertions of document destruction are expected to strengthen efforts to conduct Congressional hearings into Global Crossing's spectacular collapse. The company is one of several whose building of a huge fiber optic network created a glut of capacity.
People close to Global Crossing said that Gary Winnick, the company's billionaire chairman and founder, is aggressively seeking to prevent hearings from taking place by embarking on a public relations campaign to protect his and the company's image.
Mr. Winnick made more than $730 million from deals involving Global Crossing stock before the company filed for bankruptcy protection and fired more than 7,000 employees. He recently hired Rubenstein Associates, the big New York public relations firm, to represent him.
There is no evidence that any documents related to Mr. Winnick's involvement in Global Crossing were destroyed. But an electronic message from another employee, obtained by lawyers for the Ohio retirement system says that documents belonging to Wally Dawson, a senior executive and close associate of Mr. Winnick, might have been destroyed. The message's contents were confirmed by executives close to Global Crossing.
The court filing opened on Friday included sworn statements by Cathleen Kicak, a receptionist at the company, and Danuta McLennan, a former employee who is Ms. Kicak's sister-in-law.
They said they had reason to believe that Steve Scro, a project manager at Global Crossing who is also Mr. Perrone's son-in-law, and Beth Hunt, an administrative assistant who worked for Mr. Perrone, shredded documents in February.
Ms. Kicak said she "heard the sound of a shredding machine operating just before" Mr. Scro and Ms. Hunt left the storage room, according to her sworn statement. Ms. Kicak also said she saw a shredder on top of a garbage pail there after the two employees left the room.
In their own sworn statements, Mr. Scro and Ms. Hunt denied having shredded documents. Still, the assertions are expected to increase investigators' scrutiny of Mr. Perrone, an accounting strategist who came to Global Crossing from Arthur Andersen, where he was in charge of auditing Global Crossing.
Mr. Perrone appears to have helped devise a system for swapping unused communications capacity with other companies that may have allowed Global Crossing to inflate sales over the life of these contracts, according to former Global Crossing employees.
Mr. Perrone has also come under investigators' scrutiny for deals Global Crossing entered into with a Chicago-based Internet company run by his son, Joseph Perrone Jr., which industry analysts say could have gone to any number of other Internet companies able to perform such work.
Mr. Perrone remains an influential senior executive at Global Crossing. Creditors recently approved a $250,000 retention payment for him after severance payments were denied to hundreds of former employees, according to a recent bankruptcy court filing.
Mr. Perrone, reached on his mobile phone yesterday, declined to comment. Mr. Ferrara, the Debevoise lawyer who also represents Mr. Perrone, cited the statements by Mr. Perrone's associates in which they say they did not destroy documents.
In representing Global Crossing, Debevoise reached an agreement on Friday with lawyers for the Ohio public pension system, in which it agreed to hand over a list of employees whose computerized records were copied as part of the document preservation process. Debevoise also said it would notify government investigators if it discovers any information regarding the destruction of documents at the company.
Mr. Ferrara said in an interview that he did not believe there was any conflict between his representation of the company and of Mr. Perrone.
The accusations of document shredding are also likely to complicate the already delayed effort by Global Crossing's creditors to sell the company.
Executives close to the company said that the creditors had recently backed away from their ambitions to sell all of Global Crossing and were instead trying to sell parts of it.