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XXXXX DRUDGE REPORT XXXXX WED JAN 30 2002 10:36:09 ET XXXXX
INTRIGUE SURROUNDS $400 MILLION GOVERNMENT AWARD TO GLOBAL CROSSING
Last summer the Bush Administration canceled a Defense Department contract valued up to $400 million with the soon-to-be bankrupt GLOBAL CROSSING after question were raised about the bidding process -- a process top-level GOP insiders now suggest was sweetened by players from the previous administration!
GLOBAL CROSSING filed the 4th largest bankruptcy in history this week. Chairman Gary Winnick saw his stock fortune plunge to zero from a high of more than $5 billion.
During his run Winnick showered political players with cash and options, helping DNC head Terry McAuliffe turn a $100,000 stock investment into $18,000,000 in the late 1990s. Winnick gave a million dollars to help build Clinton's presidential library; hosted fundraising dinners for Senator Tom Daschle; gifted thousands of dollars to Rep. Henry Waxman and other key lawmakers on both sides of the aisle.
Six months before Winnick's stunning bankruptcy call -- the United States awarded GLOBAL CROSSING a massive contract, which called for an extensive phone and data network linking more than 6,000 scientists and engineers at far-flung defense test centers, laboratories, universities and industry locations.
The three-year fiber-optic contract, valued at $137 million for the initial phase and more than $400 million if the Defense Department exercised all options, was canceled just a month after it was awarded when serious question were raised about the bidding process.
"We think there's something smelly here," said Ray Bjorklund, vice president of Federal Sources Inc., a market research and consulting firm. "Something was wrong in the award."
Protests were lodged by AT&T CORP., QWEST COMMUNICATIONS INTERNATIONAL INC., SPRINT CORP. and WORLDCOM INC. after a lengthy bidding window, which began during the Clinton administration.
"Flags have been raised all over the place about GLOBAL CROSSING winning this deal," a top congressional source told the DRUDGE REPORT late Tuesday. "It sure looks like someone in high office wanted GLOBAL CROSSING from the git-go."
"The U.S. taxpayers sure are fortunate the Defense Department made a quick reversal," said the congressional source. "[However,] I sure would like to know how a company that was on the verge of bankruptcy got the contract! Spread a little money around? Give some cash to a presidential library, take some folks out to fancy dinners? That's all it took? We've got to take a look at this."
A finance executive at Winnick's CROSSING warned last August -- just weeks after the lucrative Defense Department contract was awarded -- how the company's financial condition was being enhanced with misleading accounting techniques.
The five-page letter, written by the former vice president of finance, contains a detailed analysis of deceptive accounting practices: including inflating revenue and cash-flow figures, numbers that may have helped convince investors and analysts that GLOBAL CROSSING was healthier than it was, the LOS ANGELES TIMES reported in Wednesday editions.
Eat your chart out, ENRON!
Filed By Matt Drudge
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