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Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to Boost Revenues?
Subcommittee on Oversight and Investigations
Ms. Lenette Crumpler
Thank
you, Mrs. Slaughter, for your kind introduction. And thank you, Mr. Chairman and members of the Subcommittee
for holding this hearing and letting me tell you what happened to some of
Global Crossing=s
employees because of the mismanagement and corporate greed of the people
running the company. I
grew up in a small rural town, Williamson, New York. While riding on the
school bus one day; I overheard the conversation of a foreign exchange student
from Thailand. He said -- "In America...I cannot tell who is rich or
poor." Now, I was only in the third grade, and I asked myself two
questions: What does he mean? And why does he say that? I simply couldn't
figure it out. For some strange reason, his comment always stayed buried in my
mind. It was not until my fifth grade study in American History and our
presidents that I learned about the presidency of Theodore Roosevelt and
finally found the answer to my two questions. Despite
his wealth, Theodore Roosevelt became a President who saw himself as
a..."steward of the people." He didn't like what he saw going on in
corporate America where the rich Robber Baron owners of companies were
becoming billionaires off the backs of the working poor. This President
envisioned a greater America. . . an America where all people could prosper.
He battled with the Barons of corporate America in the early years of the 20th
century. He used his executive powers and championed the passage of new laws
such as anti-trust, -- monopoly, --child labor laws, etc. Because of the
vision of this President, the working poor class of America became the working
middle class of America. This
is what makes America different from other countries. From that moment on, I
realized that, although I am a descendent of slaves, I'm also blessed to have
been born in the greatest country on the earth. . . the United States of
America: a place where impossible dreams can become reality. This is my story. I have worked for 31 years at the phone company. I lost my entire 401(k) money B $86,000 B when Global Crossing went bankrupt. I raised two children all by myself, and I never asked the system for one penny because I worked for Frontier (formerly Rochester Telephone Co) which was a family-oriented company. I didn't have to ask for help. All you had to do was come to work on time and give the company an honest, full day's work, and you would always have a job. The odds of a single mother accomplishing such a feat are astronomical! I
accomplished the near impossible. To me, $86,000 to supplement my pension was
like having a million dollars. I was so proud of myself. I thought for sure
with Global Crossing buying Frontier, I would reach my goal of $100,000 so
that my retirement years would be comfortable years, and I even could leave
something for my children. That's why I held on, believing the statements the
Global Crossing executives made when the stock was failing. Tom Casey sent an
e-mail telling us the company was fully funded for two years and could weather
the storm. Joe Clayton sent us an e-mail saying that Wall Street Journal was
wrong about Global Crossing=s debt. With information like that, I knew I had
another three to five years to work. . . so why not hold onto the stock? It'll
eventually go back up eventually. Our phone company stock always had been rock
solid. How was I or any of us to know that no longer were there men of
integrity at the helm of our 100-year-old phone company? Instead, our leaders were men of gluttonous greed who told shareholders
to hold on while they were unloading their stock options and bailing out fast,
because they knew something we didn't know. The company filed for bankruptcy
in January of 2002, leaving us
shareholders holding the empty bag. Now sadly -- because I believed all the lies of executives of Global Crossing, I have now lost all retirement money. Shattered are my dreams of having a modest retirement in Florida in a lovely retirement community called The Villages, where I had visited and had looked at a model home. Thanks to Global Crossing that will be a dream unfulfilled. I no longer dream of retirement. I now worry whether I will be able to keep my job or will I be the next one laid off. For if I get laid off, I will surely lose the house that I now own in upstate New York. I' am heartbroken. And I am hurt because I did all the right things. I was truly an idealist . . .a dreamer. . . an achiever...when great astronomical odds were against me as a single mother to amass that kind of money. Now this is what happened to me because I believed in the system, and the system let me down.So,
here we are in the 21st century . . .101 years after the start of the
presidency of Theodore Roosevelt. Now new Robber Barons, such as Gary Winnick
of Global Crossing, even more ruthless than their
predecessors, have shown their ugly faces in corporate America. This time, however, their greed is even colder,
crueler and more calculated than ever before. They have literally stolen the wealth of the working middle class
Americans B their own employees B right out from underneath their noses before they even knew what hit
them. Their greed is of an
immoral, gluttonous nature. After cleverly succeeding in transferring the
wealth out of the pockets of the working middle class directly into their own,
these 21st Century Robber Barons have the nerve to seek protection through
bankruptcy laws and, at the same time, present the illusion that their
companies just need to reorganize to survive. These Global Crossing's Robber Barons know full well that it was their gluttonous thievery that caused the company to go under. They are hiding behind bankruptcy laws while unloading their debt so that they can start all over again with clean balance sheets. Then, to add insult to injury to the working middle class Global Crossing/Frontier employees, after stealing our 401(k) life savings, under the false pretense of this bankruptcy reorganization, they now are laying us off in record numbers. Having cooked the accounting books, these Robber Barons successfully collapsed the company into bankruptcy. Simultaneously, they have collapsed and shattered the dreams of many working middle class people and their families. This is why I am here today speaking on Capitol Hill. I've shared with you my shattered dreams but this isn't just about me. So many working, middle class Americans dreams have been shattered I would like you to hear what they have told me... $ "I have lost my job and I can't find work here, so I will have to move to another state to look for work." $ "I have no more money B I have lost it all, now I must sell my beloved home" $ "My child has cancer, and I have no more health care - what shall I do?" $ "I am 72 years old - who will hire me?" $ "I am 47 years old, and I shall have to work now until I am 75 or 80 years old". $ I am 53 years old - I'm too old to start over and recoup my losses.@ $ "It didn't have to be this way - I believe in the system and the system let me down - I've lost everything...now my children won't be able to go to college". $ "Thanks to Global Crossing I'll have to work another 10 years to try to save money and I am not a healthy person... I take 8 pills a day and I'm tired.@ $ A I lost $500,000 dollars I worked so hard to save that money in my 401(k) and I should be retired now... but I can't afford to.@ $
A dentist said, "What is happening here with corporate greed is
the domino affect. When people get laid off in great numbers and can't find
work, they have to move away to find work. So even we local doctors and other
businesses pay in lost customers." People's
lives have been devastated. They've lost their new home. They've lost their
ability to send their children to college. They've lost their medical
insurance. They've lost their retirement savings. They've lost their pride,
their security, their self-confidence. They've lost their faith in the
American Dream. All because of the greed and mismanagement of individuals who
should have been looking after the well being of the shareholders and
investors of the company instead of lining their own pockets. The officers of
Global Crossing have left thousands of employees, stockholders and investors
holding an empty bag. Now is the time for this government to clamp down hard on corporations...specifically those in charge at Global Crossing who led their company to ruin, taking many hopes and dreams with it. It is the responsibility of this government to restore the confidence of working class Americans who only desire to continue working so that all can prosper - both management and the workers. There
has been a lot of talk about heroes over the last year. Our firefighters are
recognized as heroes. Our police officers are recognized as heroes But those of
us who get up each and every morning, whether we are tired or energized, whether
we are sick or well, whether we love our job or dislike it, those of us who go
to the office, or the factory, or the warehouse, we are heroes too. We'll never
be given a parade or a medal. But we are heroes to the families who depend on
our income for food and shelter. We are heroes to those who rely on our
employment to obtain health care. We are heroes to those who depend on our tax
contributions to obtain needed services. Please don't forget these heroes.
Please don't allow these robber barons to victimize our everyday and unsung
heroes by destroying their dreams. Please
have the same vision and courage shown by the visionary, President Theodore
Roosevelt ..."Speak softly but carry a big stick". Please, on behalf
of all of the Frontier and Global Crossing victims, look hard at the management
of Global Crossing. Please use your powers to effectively punish those who have
committed these crimes. Please, seize their assets and return those assets to
the rightful owners. And, please, legislate whatever new laws are necessary so
that such abuses never, ever occur again. Thank you.
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