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Global Pressured Employees to Make Campaign Donations

Fund-raising: Telecom giant's tactics included letters and visits from the co-chairman's daughter.

April 14, 2002|ELIZABETH DOUGLASS and KAREN KAPLAN | TIMES STAFF WRITERS

As Global Crossing Ltd. grew from a telecom pipsqueak into a $55-billion fiber-optic giant, company executives sought to gain influence in Washington by showering millions of dollars around the Capitol.

But with Congress deepening its investigations of the company's business and accounting practices, it is becoming increasingly clear that Global Crossing was far more adept at wringing campaign contributions from employees than it was at disbursing the cash in a politically advantageous way.

Using a combination of persistence and intimidation, Global Crossing's leaders persuaded employees to pour $3.6 million into Beltway coffers, including $2.8 million in the 1999-2000 election cycle. That placed the company 23rd on the list of top donors to national political parties, candidates for federal offices and political action committees, said the Center for Responsive Politics, a watchdog group based in Washington.

Global Crossing Chairman Gary Winnick personally has contributed more than $300,000 since founding the company in 1997. The funds went to causes and candidates across the political spectrum, from liberal icon Sen. Edward M. Kennedy (D-Mass.) to conservative Senate Minority Leader Trent Lott (R-Miss.).

Winnick, an extravagant financier who spent at least $60 million on a Beverly Hills estate and adjoining property and has pledged more than $100 million to charity, wasn't the only active political donor at the company. Altogether, 78 Global Crossing executives contributed to Republicans and Democrats during the 1999-2000 election cycle.

"Everybody had to make contributions," said a former Global Crossing executive who was frequently badgered for donations. "You were permitted to say no, but they expected you to give money."

Several former executives and employees agreed to talk about the internal fund-raising efforts, but they did not want to be named because they are bound by confidentiality agreements or fear retribution.

Global Crossing spokeswoman Becky Yeamans said that although senior company executives believe that "participating in the political process" is part of being a "good corporate citizen," employees were not pressured to contribute.

"The decision to support any candidate by individual employees of Global Crossing is entirely voluntary and unrelated to employment," Yeamans said.

The company and its political action committee together have contributed more than $1.3 million to federal political causes alone since 1997, according to the Center for Responsive Politics, which bases its numbers on federal filings.

More than $150,000 also flowed to Washington from Global Crossing employees through Pacific Capital Group, the private investment firm run by Winnick that shared Beverly Hills office space with Global Crossing.

Bermuda-based Global Crossing, which operates a global telecommunications network, has been under scrutiny since it filed the nation's fourth-largest bankruptcy in late January. The company's accounting and other practices are under investigation by the Securities and Exchange Commission and the FBI.

The money-raising machine was simple but effective. Target candidates and causes were handpicked at the highest levels of the company, typically by Winnick, Global Crossing Co-Chairman Lodwrick Cook or former board member Norman Brownstein, a political fund-raiser and longtime friend of Winnick.

When money was needed, a note would be dispatched to a select group of employees, usually managers with relatively high salaries. "There was always a specific amount needed," according to a person familiar with the practice.

"Typically, a memo would come out and say, 'We like this person, and this person is a good person, and we should support their campaign. We would like you to contribute,'" said another former executive. "People would say, 'Can I come and pick up the check?'"

Some executives succeeded in skirting the appeals, but it took guts. The letters usually included the phrase "Gary would like you to

It wasn't easy. Workers who tried to ignore the memos were visited by Lodwrick Cook's daughter, Sherri Cook, a Global Crossing attorney.

"Sherri would go into their office and talk to them," said a person familiar with the practice. "When Sherri Cook came into your office, she wasn't just someone asking for a donation. She was Lod Cook's daughter."

Lodwrick Cook and a spokesman for Winnick did not return calls seeking comment. Sherri Cook said she did not pressure anyone to make campaign contributions. "I believe it's my duty as a good citizen to educate others about our political process, so that they can exercise their freedom of choice, and I've been faithful to that duty," she said. "In so doing, I've always taken great pains to make sure that none of my friends or colleagues felt pressure to contribute to a campaign that I supported."

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