Posted on 06/14/2002 3:18:36 PM PDT by callisto
Raleigh) – In today’s Charlotte Observer, Democrat U.S. Senate candidate Erskine Bowles answers a series of questions sent in by readers, and in the process makes a statement so unbelievable one would think it came from Bowles’ former boss Bill Clinton.
Democrat U.S. Senate candidate Erskine Bowles doesn’t want voters to know about his personal involvement in making risky investment decisions after being hired to “operate” the investment firm Forstmann Little – which led to the loss of $1.5 billion “almost overnight” for investors and even millions of a state’s pension fund which is now suing the firm. (New York Times, 2/24/02)
In a shocking statement today, Bowles downgrades his top role at the investment firm as “part-time,” shifts blame to the firm’s other partners, then takes credit for Forstmann Little’s 20-year record though it was only in 1999 that Bowles was hired to “operate” the firm. (NY Times, 2/24/02)
“Q. As a managing partner at the New York investment bank Forstmann Little, you were involved in risky investments in two telecommunications companies that ultimately resulted in a state pension fund loosing millions of dollars. How do you explain your involvement?” Chris Sheehey, Matthews
BOWLES: “I was one of many partners at Forstmann Little. I was there part-time on and off for a couple years. But I had had a chance to work with the leadership of Forstmann Little for over a 20-year period and during that time period the track record of that company had been enormously positive. In fact they had a return of their investment of over 35 percent ... Just like with every other investor, not every investment is successful. But in the case of Forstmann Little, the vast majority of investments they’ve made have been quite good.” (Charlotte Observer, 6/14/02)
-more-
NCGOP Press Release 6/14/02
IS BOWLES LYING?
The New York Times reported on February 24th, 2002 that Forstmann Little “lost $1.5 billion almost overnight on its investment in XO Communications.” Ted Forstmann said, “We clearly invested in XO too early and at too high a price.” He was so ashamed, Forstmann said, that the firm “would not take its usual fee for managing the $1.5 billion it had lost.”
“Between his investments in XO Communications and McLeodUSA, a telecommunications company that filed for bankruptcy in January, Mr. Forstmann has now lost more than $2 billion of his investors’ money in a year,” which “has investors and Wall Street denizens questioning whether Mr. Forstmann has lost his Midas touch.” Mr. Forstmann “has acknowledged to friends that he might have taken his eye off the ball when the investments in McLeodUSA and XO were made in 1999.”(NY Times, 2/24/02)
WHO WAS IN CHARGE DURING THESE DEBACLES? – ERSKINE BOWLES!
“In 1999, Mr. Forstmann hired Erskine B. Bowles, a former White House chief of staff, as a general partner to operate the firm. It was Mr. Bowles, who left Forstmann Little last year, who had pushed for investments in the now-troubled telecommunications companies, people close to the firm said. In the memo, obtained from investors last week, Mr. Forstmann acknowledged that his firm’s investment strategy shifted under Mr. Bowles.” (NY Times, 2/24/02)
According to a McLeodUSA press release issued in 1999: “As General Partner at Forstmann Little since January of this year, Mr. Bowles focuses on the firms’ existing portfolio companies and on developing new investments for the firm.” “Mr. Bowles was involved in the recent decision to invest $1 billion in McLeodUSA to fully fund its current business plan. ‘One of the most compelling reasons for selecting McLeodUSA for this substantial investment was the quality of their leadership team and their track record of outstanding execution. I look forward to seeing this very capable team in action as Ted and I become involved in Board activities,’ stated Mr. Bowles.” (McLeodUSA press release, 9/15/99 - “Erskine Bowles, General Partner at Forstmann Little, Will Join McLeodUSA Board of Directors; Forstmann Little and McLeodUSA Conclude $1 Billion Investment”)
Given you clearly had a key role in these financial debacles, isn’t your answer in today’s Charlotte Observer untruthful? Isn’t it wrong to shift the blame to others? And wrong to take credit for Forstmann Little’s 20-year performance record when you were only there since 1999? If you bear responsibility for these billion-dollar losses, shouldn’t you own up to it?
-NCGOP-
For more information, contact Communications Director Jonathan C. Jordan at (919) 828-6423.
MKM
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