GLOBAL CROSSING PAID PREMIUM FOR TELECOM LOBBYING

Before it entered bankruptcy earlier this year, Global Crossing had spent $10 million over last 3 years in campaign contributions and direct lobbying Congress, FCC and FTC, according to public disclosure records. In 6-month period in 1999, for example, Global Crossing paid former Asst. Attorney Gen. Anne Bingaman -- wife of Senate Energy Committee Chmn. Bingaman (D-N.M.) -- $2.52 million in successful lobbying campaign against U.S.-Japan cable proposed by AT&T, WorldCom and Sprint. When it began its Washington spending binge in 1999 it was focused on traditional telecom issues such as implementation of 1996 Telecom Act, although company’s interest in broadband led it into Internet-related topics as well.

Congress so far has been focused on Enron, with more hearings this week, but some on Hill have told us that Global Crossing -- which is being investigated by FBI and SEC -- could be subject of hearings soon. If so, members would, as with Enron, find themselves in uncomfortable position of grilling executives of a company from which they had accepted campaign contributions.

Global Crossing gave more than $3.5 million to politicians and political parties in 1998-2001 span, according to data compiled by Center for Responsive Politics. Of that, 55% went to Democrats and 45% to Republicans, with $2.76 million in soft money. Senators received most of Global Crossing’s direct contributions, with Senate Commerce ranking Republican McCain (R-Ariz.) receiving $31,000, just ahead of Senate Internet Caucus Co-Chmn. Burns (R-Mont.) at $30,750. Top Democratic recipient was Sen. Feinstein (Cal.) with $24,000. Total of 33 senators received donations during that time. Other top recipients included Sen. Kennedy (D- Mass.) with $20,000, Sen. Kerry (D-Mass.) $20,000, Senate Judiciary Committee ranking Republican Hatch (Utah) $19,500, Sen. Frist (R-Tenn.) $17,000, Senate Minority Leader Lott (R- Miss.) $15,000, Sen. Cantwell (D-Wash.) $12,500 and Sen. Nelson (D-Fla.) $12,000. Money came from Global Crossing’s political action committee (PAC) and from executives.

House members received less than senators, but largest recipient in House from Global Crossing was House Telecom Subcommittee ranking Democrat Markey (Mass.), with $12,500 over that period. Markey generally eschews PAC donations, but Global Crossing gave money from individuals as well. House Telecom Subcommittee Chmn. Upton (R-Mich.) received only $500, while House Commerce Committee Chmn. Tauzin (R- La.) received $2,000 and ranking Democrat Dingell (Mich.) $1,000. Other donations of note included House Minority Leader Gephardt (D-Mo.) $2,500, Rep. Wilson (R-N.M.) $1,500, Rep. Davis (R-Va.) $1,000 and House Internet Caucus Co-Chmn. Boucher (D-Va.) $500.

Global Crossing burst onto Washington scene in terms of contributions and lobbying spending in 1999 as it made its high-profile purchase of Frontier Corp. Its lobbying focus in 1999 was on more traditional telecom items such as universal service, antislamming legislation and Telecom Act implementation. Global Crossing spent $3.11 million on lobbying in 1999, but much of that was for one specific issue, lobbying FCC not to award license to AT&T, WorldCom and Sprint to build transoceanic cable between U.S. and Japan. As part of that lobbying effort, Global Crossing paid $330,000 to Brownstein, Hyatt & Farber, $100,000 to Greg Simon of Simon Strategies, $80,000 to Swidler, Berlin, Shereff, Friedman, $40,000 to Powell, Goldstein, Frazer & Murphy and $40,000 to Bracewell & Patterson. It also paid Bingaman and her sole proprietorship $2.52 million in the first half of 1999.

Bingaman was unable to discuss her lobbying for Global Crossing but did send us statement related to her work. She said cable case at FCC involved “numerous lengthy public filings accompanied by experts’ affidavits, culminating in an unprecedented oral argument before the chairman of the FCC.” She said as result of her effort and those of others, “the FCC ultimately imposed a set of license conditions that helped to ameliorate the anticompetitive harm which Global Crossing believed had occurred, and later issued a lengthy new rule which revamped its procedures for considering cable landing license applications.” “I was paid partly on an hourly rate and partly in Global Crossing stock options,” she said, “a not uncommon fee arrangement.” She said her lobbying was limited to FCC and never involved Congress: “I have not represented or otherwise been employed by Global Crossing other than as described here.”

Internet tax, privacy and broadband promotion were of key concern to Global Crossing in 2000 and 2001, and it spent generously to lobby on those issues. Spending for 2nd half of 2001 hasn’t been reported, but in first half of 2001 Global Crossing spent $460,000 in-house on those issues, lobbying House, Senate, Dept. of Commerce and FCC. On retainer, it spent $200,000 on Brownstein Hyatt, $60,000 for Preston, Gates, Ellis & Rouvelas Meeds, and $40,000 for Swidler, Berlin. In 2000 Global Crossing spent exactly $1 million from its own shop, $385,000 for Brownstein, Hyatt and $80,000 for Swidler, Berlin.