- The Washington Times - Tuesday, August 27, 2002

Why has Democratic National Committee Chairman Terry McAuliffe suddenly become so touchy about his Midas touch in the financial markets? Does he have a "Martha Stewart problem"? If there are no skeletons in his closet, like the insider-trading insinuations rattling in Mrs. Stewart's, then why doesn't Mr. McAuliffe follow the recommendation of Democratic strategist James Carville? "What Terry ought to do, and I'm sure he will," Mr. Carville predicted in February, "is release his trading records." Those would be the trading records relating not only to the $18 million profit he made from his initial $100,000 investment in now-bankrupt Global Crossing. The records would also explain how he made millions more trading its stock and options, as he claimed to the New York Times in late 1999.
How about some disclosure from the DNC chairman?
Precisely how many millions of dollars did Mr. McAuliffe earn trading Global Crossing's stock and options? $2 million? $5 million? $25 million?
mDid Mr. McAuliffe buy significant blocks of Global Crossing stock in the months preceding the May 17, 1999, merger announcement with US West, when the stock was priced significantly below US West's tender offer of $62.50 for 39 million shares of Global Crossing? If he did, did he buy the stock on margin?
mWhat sort of call-option activity did Mr. McAuliffe pursue during the months before the merger announcement? (A call option is the right to buy a stock at a predetermined price before a preset deadline. Fantastic profits can be made if the stock price soars, as Global Crossing's did before the merger announcement.) Specifically, was there a spike in Mr. McAuliffe's call-option activity between April 22 (when Global Crossing Co-Chairman Winnick met with US West's chairman to discuss merger possibilities) and May 17 (when the merger was announced)?
In the weeks before the merger with US West was canceled, did Mr. McAuliffe sell Global Crossing stock "short," in effect making a potentially exorbitantly profitable bet that its price would plummet as, in fact, the share price did following the merger's termination?
What sort of put-option activity did Mr. McAuliffe pursue in the weeks before the merger was canceled? (A put option is a contract that grants the right to sell at a specified price a specific number of shares by a certain date. A put-option buyer hopes the stock will drop in price, offering the opportunity to earn huge profits.) Did Mr. McAuliffe purchase put options shortly before the merger was terminated?
Given that Global Crossing shareholders tendered 240.4 million shares in response to US West's tender offer, did Mr. McAuliffe receive special treatment by being put at the head of the line of those wishing to sell out?
The day after Global Crossing went bankrupt in January, Mr. McAuliffe told CNN that the firm's share price "continued to go way up after I sold my stock." This begs a few more questions: What share price did Mr. McAuliffe pay in 1997 (before the March 1999 2-for-1 split) when he made his original investment of $100,000? If he sold at Global's split-adjusted peak share price of $128.50 which he claims he did not he would have paid a price of 71 cents per share in 1997 in order to generate his 180-fold return. If he sold his shares at substantially less than the split-adjusted peak price of $128.50 as he claims then he had to have purchased his shares in 1997 at substantially less than 71 cents each. And, by the way, does he have evidence to confirm that the initial $100,000 investment was actually made?

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