Cuccinelli ad criticizing McAuliffe for Global Crossing profits sparks controversy

September 6, 2013

Attorney General Ken Cuccinelli II’s campaign for Virginia governor has begun airing an ad criticizing Terry McAuliffe for his work with the controversial fiber-optics company Global Crossing. But the Republican’s campaign has hesitated to discuss the ad as questions have been raised about the way it was made.

The ad says that McAuliffe “cashed in, walking away with millions” in profits from selling Global Crossing stock, even though the company ended up filing for bankruptcy in 2002. In the ad, three former Global Crossing employees describe how their lives were affected.

“He probably had some insider knowledge; it was a lot of lies to make money for themselves,” one former employee claims.

Mother Jones reported Thursday that two of the three workers said they had been told they were being filmed for a documentary about the company — not that their words would appear in a campaign ad. “If I had known that’s what it was for, I never would’ve agreed to the interview,” one of them told Mother Jones.

The two former employees, Corey Darrow and Deb Goehring, did not immediately respond to phone messages.

More Post coverage of the race for Virginia governor.

Unlike most of its other advertisements, the Cuccinelli campaign did not publicize this one and declined to provide a copy or the script when asked this week.

“The ad speaks for itself and captures the central premise of Terry McAuliffe’s professional life: profiting off of the backs of others with no job creation to show for it,” said Cuccinelli spokesman Richard Cullen. “With Global Crossing, McAuliffe used political connections to make millions of dollars just before thousands of employees lost their jobs and livelihoods.”

Cuccinelli’s campaign would not address whether the employees in the ad were told how the footage would be used.

McAuliffe’s campaign jumped on the Mother Jones report, and the candidate spoke about it to reporters Thursday.

“Ken Cuccinelli and his campaign have tricked people, and I would say the attorney general, that he first and foremost owes these people an apology,” McAuliffe said. “And I would say secondly, he needs to take the ad down immediately. It is disgraceful what has been done to these people.”

McAuliffe’s involvement with Global Crossing has long been a source of controversy. In 1997, McAuliffe was working as a consultant for California businessman Gary Winnick. McAuliffe later told the New York Times that he had been hired partly because “Winnick was looking for a little political action.’’

Winnick invited McAuliffe to be an early investor in Global Crossing, and McAuliffe put $100,000 into the telecommunications venture. He sold some of his shares in 1999 — when the stock was over $60 per share — for $8.1 million. McAuliffe has noted that he also held on to some shares until 2002, when the stock price was down to 14 cents.

Global Crossing filed for bankruptcy that year, and thousands of employees lost their jobs. Winnick sold more than $700 million worth of stock before the company fell. Global Crossing cultivated contacts and made donations to politicians from both parties, including a $1 million pledge to the Clinton presidential library.

Laura Vozzella in Richmond contributed to this report.

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