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Global Crossing executives face Congress

Executives of bankrupt undersea fibre-optic cable network operator Global Crossing will are to testify before the Subcommittee on Oversight and Investigations of the US House of Representatives Committee on Financial Services this Thursday (March 21).

John Legere, chief executive officer of Global Crossing, and Dan Cohrs, the company's chief financial officer, have been called to Congress to take part in a hearing that will "examine the effects of the Global Crossing bankruptcy on investors, financial markets, and employees", according to a letter of invitation from committee chairwoman and New york congresswoman Sue Kelly,.

The hearing is not the only action surrounding the bankruptcy of Global Crossing that is taking place in Washington.

The House of Representatives Committee on Energy and Commerce, which is already investigating the accounting of failed energy trader Enron, is to probe Global Crossing's financial affairs after news reports claimed that the company many have engaged in similar accounting practices. Global Crossing used the same auditor as Enron, Arthur Andersen LLP.

The committee has requested Global Crossing turn over a large number of documents, including details of indefeasible right of use contracts for capacity on cables signed since 1998, details of capacity swap arrangements with other telecommunication carriers, details of concerns over accounting practices, shares and options schemes and benefits provided to executives.

The US Securities and Exchange Commission has also launched an investigation into Global Crossing's accounting.

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