- The Washington Times - Tuesday, January 29, 2002

The chairman of the Democratic National Committee in the late 1990s cashed in $18 million worth of stock in a company that yesterday declared bankruptcy after a month of its stock being traded at Enron levels.
Terry McAuliffe made the profits off an initial $100,000 investment in Global Crossing, an owner and operator of undersea fiber-optic cables.
The Bermuda-based company yesterday made the fourth-largest filing for Chapter 11 bankruptcy protection in history, with its stock selling at 51 cents a share, down from a peak of $61.
According to profiles of Mr. McAuliffe in Worth magazine and the New York Times, Los Angeles businessman and Democratic donor Gary Winnick gave Mr. McAuliffe in 1997 the early opportunity to invest $100,000 in Mr. Winnick's new company, Global Crossing.
The stock grew in value to $18 million during the dot-com bubble of the late 1990s, and Mr. McAuliffe cashed in his stock.
"Two years later, McAuliffe arranged for Winnick to play golf with President Clinton, and Winnick then gave a million dollars to help build Clinton's presidential library," writes reporter Richard Blow in the January-February issue of Worth magazine.
In the Dec. 12, 1999, New York Times profile, Jeff Gerth reported that Mr. McAuliffe "made millions more trading Global's stock and options after it went public last year."
Now, Global Crossing shareholders are left with worthless stock.
"That's exactly the same thing Enron was involved in," American Conservative Union Chairman David A. Keene said last night. "What it tells us is what anybody who knows anything about Terry McAuliffe has known all along: He has used his political connections to make lots of money."
"Here you have Clinton contributors giving McAuliffe the inside track to make millions of dollars while using him to reach the president and the White House," Mr. Keene said. "This is a guy who might as well have patterned his life on that of Ken Lay of Enron."
Mr. McAuliffe has attempted in recent days to use the collapse of Enron and the losses suffered by its stockholders against Republicans, drawing portraits of greedy plutocrats cashing in their stock at the expense of the little guy.
"The people out there who are hurt the most are the small people, and once again the wealthy special interests got to take their money off the table, and that's what we need to investigate," he told CNN over the weekend.
Mr. Keene last night said, "I'm sure the shareholders of Global Crossing … are just as appreciative of McAuliffe as Enron's shareholders are of Ken Lay."
Global Crossing already had slashed more than 2,000 jobs, although company officials say they have no plans for further cuts among the remaining 8,000 employees.
Some Republicans were crowing last night that Mr. McAuliffe's windfall spells the end of Enron as a partisan issue.
"Before [Senate Majority Leader] Tom Daschle starts asking questions about Enron, he had better ask about Terry McAuliffe and his relations with Global Crossing," Republican consultant Craig Shirley said.
"Here are the questions I want to see asked," said Cleta Mitchell, a Washington-based lawyer specializing in elections law. "Are there shareholders who lost money? Employees whose 401(k) went into the ditch? If so, is Jesse Jackson planning to organize a motorcade to Washington of those folks who lost money on Global Crossing's bankruptcy?"
Former President George Bush once took Global Crossing stock in lieu of a speaker's fee, but it was not known last night whether he had cashed it in when the stock was valuable.
Global Crossing also was a major donor to the Republican National Convention, and a top officer at the company was a trustee of the George Bush Presidential Library fund.


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