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Wednesday, April 17, 2013

The Night I Had Dinner with Terry McAuliffe

Yes, it's really true.  Kathi and I did have dinner with Terry McAuliffe one evening.  But, truth is, it wasn't quite the way it sounds.  There were just seven of us.  But, it wasn't pre-planned.  It was right during the Monica Lewinsky scandal.  We have a tradition in our family that when your birthday comes around, you get to pick the restaurant.  It was Kathi's birthday and she picked a Japanese Steak house in Northern Virginia.  Our son, Matt, joined us for dinner that evening.  We just happened to be seated with this nice young couple and their two very well behaved children. 

The other family was Terry McAuliffe and his wife and children, but out of context I did not recognize him.  They were just a nice family out to dinner.  We made occasional small talk during the dinner and then when the dinner was about finished, we talked some more.  It went the way a conversation goes with folks you have never met before until it came out that he had raised money for Dick Gephardt in Missouri.  That's when I mentioned that I had raised money for Missouri Senator John Ashcroft.  That sort of changed the tenor of the conversation.  Then when Terry mentioned that he had golfed with President Bill Clinton that day I realized who he was.  It was almost comical.  Here we were, quite by accident, sitting at the same table with Terry McAuliffe, the President's bag man.

It was actually quite entertaining.  He told us that the scandal didn't seem to bother the President or his golf game, but he did joke that his only friend at the time was Buddy, his dog.  Of course, McAuliffe had already gained quite a bit of notoriety himself for his fund raising prowess and for his "luck" at making some $18 million through his timely investment in Global Crossings.  As you may recall, McAuliffe invested $100,000 in a new high tech company and 18 months later that investment turned into $18 million.  It was sort of like the Hillary Clinton investment of $1,000 that turned into $100,000 in the space of a year's time.

McAuliffe cashed out and shortly thereafter, Global Crossings collapsed.  Stockholders lost everything, except for McAuliffe and a few insiders, of course.  The collapse was on an Enron scale, but because McAuliffe had the right connections the scandal eventually went away.  It pays to have friends in high places.

For those of you who remember Bobby Baker, Lyndon Johnson's fix-it man, McAuliffe fits into the same mold.  Baker was a Capitol Hill aide to Senator Johnson and thanks to the connections of the Senator and the wheeling and dealing of his aide, both Baker and Johnson got rich. 

Judicial Watch conducted an extensive investigation of the Global Crossings Scandal and from that investigation they reported that McAuliffe's connection to Global Crossings was much more than just an investment.  The CEO of Global Crossings was Gary Winnick.  McAuliffe arranged for Winnick to play golf with President Clinton.  Shortly thereafter, Winnick gave a $1 milliongift to the ClintonPresidential Library.

Apparently it wasa pay to play arrangement.  By 2001, Terry McAuliffe was in the news in regard to the Global Crossings scandal.  The story runs like this…Global Crossings was given a $400 million contract by the Pentagon.  However, it turned out that there were "irregularities in the bidding process" that resulted in the Pentagon cancelling the agreement.  Perhaps a better word than the sanitized "irregularities in the bidding process" phrase might have been shenanigans.  Anyway, when the contract was cancelled, Global Crossings collapsed.

The Judicial Watch report goes on to state, "Like Enron, Global Crossings had artificially inflated its stock price while executives engaged in massive stock selling in the year leading up to filing for bankruptcy. While Global brass made billions, employees lost their life's savings as their 401(k) retirement plans were casualties in the Chapter 11 filing."

But, McAuliffe escaped scot free and $18 million richer.  Again, it pays to have friends in high places.

There's no doubt about it, McAuliffe has had an amazing career.  At just 22 he was the national finance chairman of the Jimmy Carter re-election campaign for President.  Carter lost the election in a landslide, but then, after graduation from law school, McAuliffe landed on his feet as a founder of the Federal City National Bank.  Just three years later, at the tender age of 27, McAuliffe was elected President of the Bank.  Why, because McAuliffe, like Bobby Baker, understood how to use his political connections to garner large bank deposits and to make big loans.  It was crony capitalism at best, and shady wheeling and dealing at worst.  But Terry McAuliffe wasn't finished, in fact he had just begun.

He set up a real estate company in Florida, and once again, using his political connections persuaded the trustees of union pension funds to invest millions in his little venture.  This time the political connections weren't sufficient and the real estate company was unable to re-pay a $6 million loan from the International Brotherhood of Electrical Workers.  This time the Department of Labor sued and in 2001 the trustees were forced to pay the union $4.95 million.  Once again, McAuliffe escaped without a scratch.

When Bill Clinton got elected President, McAuliffe hit his stride.  It was a simple approach.  You had to pay to play.  If you wanted to have access to the President, you had to pay up, and if you wanted special connections inside the Administration that would be financially beneficial to you, you had to shell out.  Selling a night's lodging in the Lincoln bedroom at the White House was small potatoes for McAuliffe.  He had bigger fish to fry and he got even richer in the process.  After the Clinton years, McAuliffe played an instrumental role to obtaining backing for Global Crossings.

McAuliffe's most recent enterprise was a heavily subsidized electric car venture.  He tried to arrange for a sweetheart deal in Virginia providing special treatment for Chinese investors, but when he got turned down by Virginia, he simply moved his action to Mississippi.  McAuliffe's company, GreenTech, was supposed to begin production of tens of thousands of electric cars by 2011, but it didn't happen.  In fact, the company has now been sued by the county in which it resides for back taxes.  And, oh yes, no electric cars have come off the production line.

Seeing the handwriting on the wall, McAuliffe quietly resigned from GreenTech last December.  He stole off into the night with no public notice at all.  And now he claims no knowledge of unpaid taxes or the financial mess he left behind.  And so the saga of Terry McAuliffe goes.  Others lose their life savings, but McAuliffe walks away richer than ever.

And now this paragon of virtue wants to serve in the same office held by Patrick Henry and Thomas Jefferson—Governor of the Commonwealth of Virginia.  What a disaster that would be.  I could see someone like McAuliffe running for Governor of Louisiana.  He would fit right it with the Longs and Governor Edwards and all the other shady characters that have served as Governor of that state.

But knowing McAuliffe's penchant for a grand vision, I'm sure he must feel that being Governor of Virginia would put him in a lot better position to run for President than to try to run from Louisiana. 

Maybe McAuliffe can win.  I certainly hope not.  We don't need a wheeling-dealing Governor, we need a man of principles and dedication to the rule of law as our next Governor.  And we are blessed with the opportunity to elect just such a man, Ken Cuccinelli.  What impressed me the most about Ken as Attorney General was his commitment to the law and to the Constitution of both Virginia and of the United States. 

Early on he was called into a case involving one of our state universities.  He did not agree with the position taken by this particular university, but he concluded that it was lawful and within the Virginia Constitution.  He vigorously defended the University and won the case.  That is character.  Too many judges and AGs let their political views take precedence over existing law and the Constitution.  In the case of the law, it should not make any difference whether you are a conservative or a liberal.  If you believe in the rule of law, then the outcome will be the same.  However, if you allow your political perspective to corrupt your judgment, the rule of law suffers.  And when the rule of law suffers, our entire society is wounded.

Do you really want a Governor with the questionable past of Terry McAuliffe?  What a stark contrast his character is to that of Ken Cuccinelli.  I would be embarrassed to see McAuliffe buy his way into the Virginia Governor's mansion.  Governors Henry and Jefferson will roll over in their graves if that happens.

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