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News
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Global Crossing subpoenaed
Chairman of struggling telecom company is called before Congress.
September 12, 2002: 8:08 PM EDT

NEW YORK (CNN/Money) - Gary Winnick, the chairman of bankrupt Global Crossing, has been subpoenaed to appear before a congressional committee to answer questions about the struggling company.

The House Energy and Commerce Committee served the subpoena on Winnick to appear at a hearing Sept. 24.

At the same time, the panel, which is already investigating whether Global Crossing used certain deals to inflate revenue, has expanded its probe to include Qwest Communications (Q: Research, Estimates), the Denver-based phone company that admitted this summer to improperly recording $1.1 billion in revenue.

Winnick has refused to be interviewed by committee investigators, Ken Johnson, the panel's spokesman, told the Associated Press.

Global Crossing, based in Bermuda, said in a statement that it "won't be in a position to comment further until we're able to fully examine their request regarding the hearing."

Global Crossing, which runs a fiber-optic telecommunications network, went bankrupt in January 2002 after amassing $12.4 billion in debt and facing a glut of capacity.

The House Energy and Commerce Committee has said that Winnick sold some $123 million worth of Global shares on May 23, 2001, while other insiders sold some $20.6 million in stock that month too.

The panel is concerned that Winnick may have known of problems and sold before telling investors.

Winnick attorney Gary Naftalis said his client will "respond in an appropriate matter".

"He continues to cooperate with this and other inquirers by making available all relevant documents," Naftalis said in a statement. "There is absolutely not a shred of evidence that Gary Winnick has done anything improper. All records and reports demonstrate that Gary acted at all times legally, ethically and honorably."

A subpoena may not result in testimony. Executives including WorldCom former CEO Bernie Ebbers and Enron's former chief Kenneth Lay have exercised their Fifth Amendment right against answering questions when called before Congress.

In addition to Winnick, the panel subpoenaed Global Crossing General Counsel Jim Gorton and former executive Greg Casey, according to Reuters, which said the committee wants details on network capacity deals Global did with Qwest Communications .

Attorneys for Gorton and Casey could not immediately be located, the Associated Press reported.

Committee investigators also have interviews scheduled for next week with former Qwest Chief Executive Officer Joseph Nacchio and former Chief Financial Officer Robin Szeliga, the news agency said.  Top of page


-- from staff and wire reports




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.