Crossing out Global Crossing

Posted: Feb 11, 2002 12:00 AM
On the day before President Bush gave his State of the Union Address, newspapers reported that Global Crossing, a pioneering firm who tried to lay Internet cables under the seas, was filing for bankruptcy. Despite its short and wildly ambitious four-year history, it qualified as the fourth largest bankruptcy in American history, larger than the coinciding collapse of retail giant K-Mart. What? You didn't know this? After several weeks of intense media interest in the sleazy demise of Enron, one might suspect that a bankruptcy this large would attract similar media attention. Global Crossing was also inflating its value with bad accounting, and it left employees without severance payments and health benefits, and told employees, "If your 401(k) includes investments in the Global Crossing Stock Fund ... you may lose all or substantially all of the value of that portion of your 401(k)." But Global Crossing is a scandal that directly implicates Democratic Party leaders including Bill Clinton -- so once again, it's buried. Consider that Terry McAuliffe, chairman of the Democratic National Committee, made out like a bandit by getting a special deal to buy Global Crossing stock before it was offered to the public, investing $100,000 in 1997 and cashing it in for $18 million two years later. It seems McAuliffe connected Global Crossing boss Gary Winnick with then-President Clinton. They played golf, and Winnick later gave $1 million to the impending Clinton presidential library. Winnick, by the way, came up through the junk-bond trading firm Drexel Burnham Lambert, the big media whipping boy in the 1980s. Now consider this: If weeks after Enron broke as a political story, George W. Bush was found to have golfed with a CEO of a different bankrupt company, what would be the media's reaction? "Out of control" would be about right. But any connection of a gaudy financial collapse to media fair-haired boy Terry McAuliffe has the opposite effect. To make these "Republicans are privately ecstatic" allegations a news story apparently just should not be done. And it wasn't. Time magazine, busy with its Enron covers, hasn't mentioned it. U.S. News and World Report didn't, either. Newsweek financial columnist Allan Sloan wrote about it, since he'd owned Global Crossing stock and never sold it before it crashed, but he wasn't making any political connections. The Big Three broadcasters had nothing to say about McAuliffe's millions. ABC? No mention of Global Crossing by Peter Jennings or Diane Sawyer. NBC? The network's financial expert, Ron Insana, mentioned the company in passing once on "Today" and once on "Nightly News." CBS? On Jan. 29, hours before the president's speech, Dan Rather did mention it: "The billions lost by once high-flying and politically, powerfully connected businesses such as Enron and Global Crossing have drawn a great deal of attention and rightly so," he said. That's rich irony given that this single mention is the only attention Rather's given it so far. The story that followed carried a great news angle, about how shoddy accounting at the Pentagon loses billions of dollars a year. With its 24-hour news cycle, CNN should do better, and it did. On Jan. 29, CNN reporter Jonathan Karl appeared both on "Inside Politics" and "Moneyline" to remind viewers of the McAuliffe connection. The day after the State of the Union, McAuliffe appeared on "American Morning" with Paula Zahn, and she put the uncomfortable questions to him, complete with his hilarious answers wondering about who could object to a little capitalism. McAuliffe also received one late question on the subject on the Jan. 30 "Crossfire." But what happened next suggested why this Democratic scandal might not go far. Republican National Committee chairman Marc Racicot, under fire from Bill Press and running away from questions of his Washington lawyer fees while serving the GOP, totally absolved McAuliffe. "What I know is what Terry McAuliffe has said. And I accept it at face value in the way that he's offered it. And I have no further questions." He didn't even have the courage to suggest that his party ought to expect the same courtesy from McAuliffe, who's spent two weeks talking about Bush's "Enronomics" and "Enronizing" Social Security. He capitulated to Press just minutes after Press joked, "I'm all for politicizing Enron." Despite all the reported private gloating that Global Crossing somehow neutralizes Enron, Republicans are never going to get one second's relief unless someone within the GOP has the guts to stand up and demand fairness. Think about that: It would be considered "gutsy" to demand fairness? Yes, if you're talking about Republicans.