Congress Ready to Hold Hearings Into Global

The congressional committee that investigated Enron Corp.’s accounting fiasco and document shredding is turning its focus on Global Crossing Ltd. and probably will hold hearings in the next few months over destroyed records, finances and other issues involved in the nation’s biggest telecommunications collapse.

Ken Johnson, spokesman for the House Committee on Energy and Commerce, said Monday that the panel has nearly finished reviewing thousands of pages of records and interviewing witnesses and is preparing for a hearing.

Claims of document shredding came to light over the weekend in one of the dozens of securities fraud cases filed against Global Crossing since its Jan. 28 bankruptcy filing. For a committee that put a spotlight on the shredding issues at Enron and its accounting firm, Arthur Andersen, “We’re sensitive to the words: document destruction,” Johnson said.

But those claims alone aren’t spurring the congressional investigation, he said; they represent “another in a long list of reasons to hold hearings.”

“We’re going to look at all the circumstances surrounding the company’s collapse,” said Johnson, who also is a spokesman for the committee’s chairman, Rep. W.J. (Billy) Tauzin (R-La.).

The committee had said that public hearings on the Bermuda-based fiber-optic network builder were a possibility, but Johnson said the hearings are now probable. “There are still a couple of aspects we have to check,” he said.

Johnson said it is too early to say if subpoenas will be issued to force the appearance of any witnesses, such as Global Crossing founder and chairman, Gary Winnick. Typically, the committee asks witnesses to appear voluntarily, reserving its subpoena power for those who are necessary to the hearing but refuse to show up.

“Clearly, we would be very interested in having Mr. Winnick at any hearing we hold,” he said.

The company said it has been turning over documents to the committee and will continue to cooperate with it and with other agencies that are investigating Global’s accounting methods and other operations.

Global Crossing, the fourth-largest corporate bankruptcy filing ever, is the target of probes by federal criminal authorities and the Securities and Exchange Commission. The firm and its executives also are defendants in nearly 60 securities fraud cases, which probably will get consolidated next month into one giant court proceeding.

In a series of secret filings unsealed late Friday, two employees said they heard a shredding machine operating behind a closed storage room door at the company’s main office in Madison, N.J., after Global sent employees an e-mail Feb. 7 prohibiting the destruction of records. Neither saw any shredding occur, but one said in court papers that she saw the machine in the room.

The company denied that shredding had occurred in that room but acknowledged that employees in five outlying offices had destroyed documents that were not relevant either to federal investigations or to the securities fraud cases.