The Emperor of Greed
With the help of his bankers, Gary Winnick treated Global Crossing as his personal cash cow--until the company went bankrupt.
FORTUNE
Monday, June 24, 2002
By Julie Creswell with Nomi Prins
Michael Nighan couldn't believe his eyes. As Global Crossing's North America director of regulatory affairs, one of Nighan's tasks was to review all of the startup telco's marketing and sales material. But what confused him in late 1999 was a map of Global Crossing's network that showed a fiber-optic loop around the continent of Africa. "What's this?" asked Nighan. He was told it was Africa One, an undersea broadband cable that Global Crossing planned to build for a group of telecom carriers. "But I said it didn't belong on a map of our network because one, it doesn't exist, and two, even if it did exist, it wouldn't belong to us," says Nighan, who left Global Crossing last November. The response Nighan got was, "Gary wants it there." So it stayed on the map.
Gary Winnick had never worked in the telecom industry before he founded Global Crossing in 1997. He had never run a public company before either. Yet in the late 1990s, Chairman Winnick was hailed as an industry giant, the creator of a telco that a year after going public in 1998 was valued at $38 billion--more than Ford. A little over two years later, Global Crossing is in bankruptcy and fighting to survive, part of an industry collapse that wiped out $2.5 trillion in market value. Investors and regulators are struggling to figure out what went so wrong so fast. But the real question is how such a company could survive--indeed prosper--for as long as it did.
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