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Moran Raises Failed Company

Rosalind Helderman

Waiting to see the first time Terry McAuliffe's investment in failed telecommunications giant Global Crossing would pop up on the campaign trail? Last night was your night.

In an otherwise fairly placid debate on education, Brian Moran brought the company up in response to a question about teacher pensions.

Moran never mentioned McAuliffe by name and the reference likely went over the heads of most of the 700 teachers in the audience. But it was clearly a veiled slam at the former DNC head and millionaire entrepreneur.

"Running government like a business doesn't always work," Moran said. "Running government like Wall Street definitely doesn't work. You know, business plans are about profit--I'm about people."

McAuliffe has packaged his proposals for the state as a "business plan."

Moran continued. "How many corporate disasters do we have to suffer to understand this? Corporate disasters like Enron, AIG, Global Crossing." Moran said those were failures where "investors walked away with millions leaving their employees up the pole without pensions."

McAuliffe invested $100,000 in the company, then sold stock three years before it went belly up for millions. He says he made $8.1 million on the sale of half the stock he owned and that he still owned the remainder of his stock when the company went bankrupt in 2002, leaving 10,000 employees out of work. Investors lost more than $50 billion when the company died.

McAuliffe was never an employee or board member of the company but, still, voters may find the profit he made at the ultimately unsuccessful company distasteful. He's been criticized for it in the past, largely by Republicans when he was head of the Democratic party.

Elisabeth Smith, a spokesperson for McAuliffe, responded to Moran's comments:

"While Virginia is facing the greatest economic crisis since the Great Depression, it's unfortunate that Brian Moran is rehashing old Republican attacks that were debunked and discredited by news organizations years ago. These attacks didn't work then, and they will not work now. Terry will continue to discuss his experience creating thousands of jobs and his plans to get Virginia's economy back on track."

By Rosalind Helderman  |  April 24, 2009; 4:37 PM ET
Categories:  2009 Governor's Race , Brian J. Moran , Rosalind Helderman , Terry McAuliffe  
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So McAuliffe has a "business plan" for Virginia but we're not supposed to consider his track record as a businessman. And he has no track record in government to consider. He's a professional organizer, campaigner and fundraiser. All great skills to win an election, but not necessarily the core skill set needed to govern. Whatever his Democratic opponents are bringing up now will surely be brought up by the GOP later. To say these things are not relevant is to be in denial.

Posted by: csread | April 24, 2009 6:23 PM | Report abuse

I don't understand what the issue is supposed to be with McAuliffe's investment in Global Crossing (a company I used to work for). He made a lucky early investment and sold half of his stake when it took off. Another person who made even more money from Global Crossing was former President George H. W. Bush, who was paid for a speech to the company with $50,000 in stock that he sold for $14 million. In neither case is there any evidence of inside trading. They simply sold when they made a lot of money, which is what you should do with at least a big chunk of any single stock that takes off like that, rather than waiting for regression to the mean (or bankruptcy, in this case).

BTW, the "failed company" of Global Crossing still exists, employs thousands of people, and carries much of the world's Internet traffic, including a lot of traffic for Akamai's content distribution network, which hosts content for the Washington Post.

Posted by: JimLippard | April 25, 2009 11:44 AM | Report abuse

I wonder if undecided Virginians will be more attracted to frivolous whining [Global Crossings stock was sold before negative signs showed] or to optimism. If Brian Moran is shaken by the fortunes borne by McAuliffe's talent, perhaps he should also remember that it's bad to covet another's possessions.

Posted by: robsmithiii | April 27, 2009 7:18 AM | Report abuse

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