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Why Terry McAuliffe's career as a Democratic candidate was over before it began. [View All]

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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-10-09 12:31 PM
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Why Terry McAuliffe's career as a Democratic candidate was over before it began.
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Edited on Wed Jun-10-09 12:39 PM by leveymg
Let's call this The Tale of Two Tranches. Terry McAuliffe was an extraordinarily effective political fundraiser, but that would prove to be the undoing of the candidates who took the huge amounts of money he raised. Before TM lost his bid to become a Democratic Governor of Virginia last night, he had already contributed enormously to the poisoning of the reputations of Bill and Hillary Clinton.

For Terry McAuliffe, political fundraiser:

No enterprise was off-limits, no matter how tarnished the reputation of the company: weapons-makers, oil companies, chemical manufacturers, banks, sweatshop tycoons. Indeed, McAuliffe made his mark by targeting corporations with festering problems, ranging from liability suits to environmental and worker safety restraints to bothersome federal regulators. The more desperate these enterprises were for political intervention, the more money McAuliffe knew he could seduce into DNC coffers. What about environmental groups? Big labor? The traditional core of the Democratic Party? Not only didn't their objections (assuming they voiced any) matter, they actually made McAuliffe's pitch more appealing to the corporadoes. After all, the Republicans didn't have any sway over these organizations. Triangulation, the backstabbing political playbook of Clintontime, originated as a fundraising gimmick. A very lucrative one.

In the early 90s, really big money began to pour into the DNC. McAuliffe recruited robust donations from Arco and Chevron, Entergy and Enron, Phillip Morris and Monsanto, Boeing and Lockheed, Citibank and Weyerhaeuser. Many of these corporations had all but abandoned the Democrats during the Reagan era. McAuliffe lured them back with promises of favorable treatment by a new generation of anti-regulatory Democrats attuned to the special needs of multinational corporations. This was the mulch bed from which the Clinton presidency took root.

By 1994, Clinton himself had aligned himself to McAuliffe's magic touch. He tapped him as the chief fundraiser for the 1996 reelection campaign. In this capacity, McAuliffe masterminded some of the more risqu political fundraising operations since the Kennedy era. There were the fundraisers at Buddhist temples in California. There were the notorious coffee klatches, where for a six-figure contribution to the DNC, corporate executives were brought to the White House for some face-time with Bill and Hillary, Al and Tipper, and a retinue of cabinet secretaries, with pen in hand ready to address any nagging problem. McAuliffe also devised the plan to rent out the Lincoln Bedroom to top contributors for slumber parties with the president.

Over the course of the next six years, McAuliffe was personally responsible for raising, largely from corporate sources, more than $300 million for the DNC.

All that loot comes at a cost and strings attached, of course. One of the costs was that Clinton had a reputation, even among other Democrats and his Vice President, for being ethically challenged and compromised by individuals who did not have the interests of the United States principally at heart. Buddhist Temple is coda for Chinese intelligence, and what exactly was the PRC after? A continuation of a policy that went back to Bush, Sr., involving the sharing of technology and intelligence. GHW Bush had made several such uncomfortable alliances, such as the "Safari Club" arrangement (GOOGLE it) he hatched in 1976 with Prince Turki, head of Saudi GID intelligence, and the parallel deal he made with the Pakistanis that allowed AQ Khan to develop the "Islamic atomic bomb" in exchange for their cooperation in bringing down the Soviets. See,

The story of Global Crossing and Gary Winnick is the story of two tranches, one which went to G.H.W. Bush and the other went through Terry McAuliffe. Here's the TM side of the deal:

In 1996, McAuliffe met a young corporate tycoon named Gary Winnick, who had once referred to himself as the richest man in Los Angeles. Winnick ran Global Crossing, a fiber-optics company chartered in the tax-friendly haven of Bermuda. At the time McAuliffe met Winnick, Global Crossing was a privately held company, poised to cash in on the deregulation of the telecom industry and the new opportunities in China. In 1997, Winnick offered McAuliffe the opportunity to purchase $100,000 worth of Global Crossing stock.

When Global Crossing shares went public in 1998, the value of the stock soared. Operating with an acute sensitivity to the fluctuations of the market bordering on ESP, McAuliffe sold his shares at the precise moment the stock peaked. McAuliffe told the New York Times he pocketed $18 million in the deal. Within a few months, Global Crossing's stock collapsed, the company plunged into bankruptcy and more than a third of its workforce were tossed into the ranks of the unemployed.


(Winnert's contacts with Clinton arranged by TM) sent a message to federal agencies that Global Crossing was a firm that they should do business with. It soon paid off. A few months later Global Crossing won a $400 million contract from the Pentagon after repeated prodding from the White House.

After the contract was awarded, McAuliffe arranged for Winnick to play a round of golf with Clinton. Shortly after the afternoon on the links, Winnick donated $1 million to the Clinton presidential library.

Winnick's joy was short lived, however. In the winter of 2001, the Pentagon rescinded the Global Crossing deal following an investigation by the Inspector General of the Defense Department, which raised questions over how the contract was awarded and Global Crossing's ability to fulfill its obligations. Later, the company fell into the financial death noted above. Ibid.

According to St. Claire, the Bush side of the tale of two tranches goes like this:

The attack dogs in the Bush White House never really made much of McAuliffe's ripe ties to Global Crossing. Why? Global Crossing had been almost equally generous to the Bush family.

In 1997, Global Crossing invited former President George H.W. Bush to address company executives in Tokyo, Japan. At the time, Bush's standard speaking fee was $80,000. The morning after the speech, Bush had breakfast with Winnick. Winnick advised Bush that it would prove much more profitable for the former president to accept payment in Global Crossing stock, then privately held, than cash. Bush agreed. Soon the company went public and the value of Bush's stock swelled to more than $14 million. Not a bad pay-off for an hour's speech. To complete the symmetry, one of Winnick's top executives also serves as a trustee of the G.H.W. Presidential Library Fund.

Winnick tried to cover all of his bases. Yet as with Enron and Tyco, even the most judicious dispensation of money across the political spectrum couldn't save a company that had been looted from the inside out. Global Crossing went down and so did Winnick. But the politicians who made it all possible remain indemnified from any liability for the carnage, protected by a mutually advantageous non-aggression pact. Id.

In 1999, Global Crossing formed a 50/50 joint venture with Hong Kong-based Hutchison-Whampoa Ltd. Three years later, Hutchison-Whampoa acquired the assets of bankrupt Global Crossing for pennies on the dollar. Global Crossing had laid 100,000 miles of high-capacity, fiber-optic cable under the Atlantic and Pacific oceans before going under. The company controlled 15 percent of the fiber-optic capacity between Europe and the United States, and 23 percent between Asia and America.

The ties between Global Crossing and Chinese intelligence had worried the U.S. military. The use of that network put clandestine U.S. global communications at risk of interception. The chairman of Hutchison-Whampoa, Chinese billionaire Li Ka-shing, is linked to former Chinese military intelligence director, Gen. Ji Shengde. Li Ka-shing also sits on a board of a company tied to the Chinese People's Liberation Army that trades technology with Pakistan and several Middle Eastern countries.

If you don't know about this, you haven't been paying attention.

Terry McAuliffe was damaged goods, and he wasn't going anywhere in political office where these facts might again arise to haunt him.

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