ALEXANDRIA – In response to repeated questions from reporters and during debates and a recent report by the Associated Press, the Moran campaign is seeking clarification from Terry McAuliffe about his membership on the corporate board of Telergy, a telecommunications firm, and its connection to Global Crossing.
“Virginians deserve to know the truth behind McAuliffe’s claims, but he certainly hasn’t shared it with them yet. He claims he didn’t give back his multi-million dollar windfall from Global Crossing to help unemployed workers because he wasn’t in control of the company,” Campaign Manager Andrew Roos said. “He got a seven-figure windfall from Telergy, but didn’t give it back to the unemployed workers even though he was on the board and helped them raise 40 million dollars in capital. Terry McAuliffe has taken a wall street attitude toward employees in the past and in this case he seems to have violated even his own standards.”
Despite the fact that McAuliffe was a paid consultant of the Global Crossing CEO, worked out of his office and convinced him to invest $40 million in another telecommunications company (Telergy), he claims he had nothing to do with running the company. McAuliffe made as much as $18 million while over 10,000 people lost their jobs and more lost pensions and retirement savings, but McAuliffe said he had no responsibility to those people. Reporting shows that McAuliffe was directly involved in Telergy’s management when it went bankrupt, laying off hundreds of people, which begs the question, wouldn’t he have an obligation to those workers who were put out of work with no severance, by his own standards?
(Associated Press, Investment Questions Dog McAuliffe in VA Race, May 27, 2009)
“With just one week left in this election, McAuliffe continues to hide the truth about his business record,” Roos continued. “The hypocrisy that his statements in the Sorensen Debate point to is almost hard to fathom, and Virginia Democrats aren’t going to stand for it.”
McAuliffe: “I would have taken care of it.”
At a debate last month in Danville, McAuliffe was questioned as to why he did not give the $18 million he made from Global Crossing back to the workers who lost their livelihoods and the retirees who lost their pensions when that firm when bankrupt.
McAuliffe responded by saying, “I never did anything for Global Crossing. I was a venture capital investor in several 100 companies. I was never at their headquarters. I never worked for them. I had nothing to do with the management and had I been chairman and had something to do with it, I would of taken care of it.” (Sorensen Debate, April 28, 2009)
…but he left Telergy with Millions. Hundreds left without jobs.
After a recent Associated Press investigation into McAuliffe’s business background raised questions about his culpability for Telergy’s failure, Brian Moran’s campaign manager, Andrew Roos, made the following statement.
“The facts about Telergy make it clear that Terry McAuliffe is incapable of telling the truth about his business record. First he tells us he’s a successful Virginia businessman, then we find out they’re just shell companies run out of his house. Now he tells us that he would take responsibility if he’d ‘had something to do’ with a company that hurt workers, but we find out he was involved in exactly that and did nothing to help people.
Terry McAuliffe sat on the board of Telergy and even helped raise $40 million from now-defunct Global Crossing to help the company. In the end, Terry McAuliffe made $1.2 million but, despite being a board member of the company, he gave none of those funds back to the 615 workers who lost their jobs when the company shuttered its doors.
Terry McAuliffe has said he’ll bring his business background to the Governor’s mansion. But with GM plants closing and Wall Street bailouts mounting, Virginia families can’t afford Terry McAuliffe’s kind of experience in Richmond.”
The Facts on Telergy
Terry McAuliffe was a member of the Board of Directors of Telergy, a telecom company, from 1999 to 2001. As a Board Member, he had oversight responsibility over the executives of the company. Telergy paid McAuliffe at least $1.2 million for his services, which included raising funds from Global Crossing. McAuliffe bailed from Telergy within days of it firing 150 employees without severance pay in August of 2001.
McAuliffe claimed he did not know about the company’s financial position, even though he was a corporate Board Member. He further said he didn’t have the time to be involved with his Board responsibilities. By December of the same year, Telergy was bankrupt and an additional 300 people lost their jobs without severance pay.
The Telergy Timeline of Failure
- August 1999: McAuliffe is named a Director on the Board of Telergy. He has reportedly been helping the company for three years prior. (The Post-Standard, Wired: Inside Telergy, December 10, 2000)
- September 1999: Global Crossing, which would later go bankrupt itself, invests $40 million in Telergy after McAuliffe’s encouragement. In December, McAuliffe would admit to contacting Global Crossing on Telergy’s behalf. (Business Wire, Global Crossing Acquires Rights to New York Fiber Network, September 15, 1999; The Post-Standard, Wired: Inside Telergy, December 10, 2000)
- December 1999: Telergy pays McAuliffe at least $1.2 million for raising money for the company. McAuliffe would not say who else, besides Global Crossing, he had contacted to invest in the firm. (The Post-Standard, Wired: Inside Telergy, December 10, 2000)
- August 8, 2001: Telergy lays off 150 employees without giving them any severance pay. (Associated Press, Tech Bust Hits Telergy, 150 Lose Jobs, August 9, 2001; The Post-Standard, Florida Company Owed $47,000 by Telergy, August 18, 2001)
- August 18, 2001: McAuliffe claims he was not aware of Telergy’s financial troubles and that he had resigned from the Telergy Board just two weeks prior. McAuliffe claimed “I just do not have the time to be on any board.” (The Post-Standard, Florida Company Owed $47,000 by Telergy, August 18, 2001)
- September 2001: Telergy lays off another 300 employees without severance. (The Post-Standard, Telergy Founders Share $1.5 M; Nothing for Laid Off Workers. December 6, 2001)
- December 21, 2001: Telergy declares Chapter 7 bankruptcy. A total of 615 people lost their jobs in the company’s failure. (The Post-Standard, Judge Agrees to Liquidation for Telergy, December 15, 2001; The Post-Standard, Telergy Founders Share $1.5 M; Nothing for Laid Off Workers, December 6, 2001)
By his own standards, he’s responsible. “There’s a difference between being a mere investor, which millions of people are every single day in this country, and running the company, and making decisions that affect people’s jobs and affect shareholder value.” – Terry McAuliffe, while criticizing George W. Bush’s involvement with Harkin Energy and defending his involvement with Global Crossing. (National Review, Like a Bandit: The Curious Riches of Terry McAuliffe, Democratic Honcho, Date)
Posted By Valerie Garner
Categories: Election 2009, Politics, State Politics
Tags: democrat, election2009, governor