Global Crossing Turns Over Papers to House Committee
House investigators Wednesday began reviewing three boxes’ worth of internal documents from Global Crossing Ltd., the ailing telecommunications firm accused of using suspect accounting to mask the company’s deteriorating finances.
The documents were delivered late Tuesday to the House Energy and Commerce Committee, which has said alleged misdeeds at the company warrant greater scrutiny. It’s unclear whether Global Crossing delivered all the information requested by the committee this month.
“It looks a little light, but we’ll know more after we go through it all,” said Ken Johnson, a spokesman for committee Chairman W.J. “Billy” Tauzin (R-La.). “We’re not going to be satisfied until we get everything that we requested.”
A team of committee investigators has begun examining the documents, a process that could take up to 10 days, Johnson said. The committee expects to interview key people within and outside the company and may hold hearings on the case.
Cynthia Artin, a spokeswoman for Bermuda-based Global Crossing, declined to discuss details of the document delivery, saying only that it is “part of the company’s response to the committee’s letter requesting documents.”
The company spent billions of dollars building a worldwide fiber-optic communications network but never came close to making a profit.
On Jan. 28, the company filed the nation’s fourth-largest bankruptcy. The company and its executives, now based mostly in Madison, N.J., have been battered by controversy ever since.
In a March 12 letter to company Chief Executive John Legere, Tauzin’s committee requested an exhaustive list of information about the firm’s accounting methods, network deals with other carriers, board meetings, allegations made by a former employee, and executive compensation, stock options and stock sales.
Roy Olofson, a former vice president of finance at Global Crossing, in August sent a letter to the company’s top attorney that outlined a string of questionable accounting practices at the firm. Olofson, who left the company late last year, has sued Global Crossing over his firing.
Olofson’s accounting allegations and others have touched off investigations and reviews by the Securities and Exchange Commission, the FBI, several congressional committees and the Pension Benefit Guaranty Corp., the quasi-governmental agency that monitors and insures pension plans.
Last week, the House Financial Services Committee held a hearing at which Legere and Global Crossing Chief Financial Officer Dan Cohrs testified about industry accounting methods and fielded sometimes hostile questions about executive compensation and capacity “swaps” between firms.
If Tauzin’s committee holds hearings, it probably will hear testimony from Olofson and other Global Crossing critics.
