Obama AG Pick Lobbied for Dicey Telco Deal

Holder and a handful of colleagues from the Washington, D.C., law firm Covington and Burling registered to lobby for Global Crossing in November of 2002, a week after a powerful panel of top U.S. officials announced it would inspect the proposed sale.

That panel, known as the Committee on Foreign Investment in the United States, reviews sensitive deals which could result in foreign ownership of U.S. infrastructure. Holder was familiar with the panel, having worked with CFIUS as a Deputy Attorney General to protect U.S. interests in earlier international acquisitions.

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Lobby registration forms filed by his firm show that Holder and his colleagues were paid to "advise and represent Global Crossing on CFIUS process and issues," including the negotiation of a security agreement that would allow a deal to go through.

The five men were in contact with the Departments of Justice, State, Defense, Treasury and Commerce on behalf of Global Crossing, as well as the White House, the filings show. The heads of those departments, and representatives from the White House, sit on CFIUS.

Their push for the initial proposed merger failed. CFIUS rejected the deal in March 2003, following a reportedly contentious meeting with representatives from Global Crossing and its would-be buyers, Hong Kong-based Hutchison Whampoa and Singapore Technologies Telemedia. Hutchison Whampoa denied the Chinese government had any influence over its business.

The rejection by CFIUS was surprising if only because it is a rare phenomenon – CFIUS has blocked only a handful of deals out of hundreds that are brought before it for review.

Months later, CFIUS approved an amended merger that came with strict requirements. The Hong Kong firm removed itself from the sale, and Global Crossing and ST Telemedia hammered out an agreement with CFIUS "to address the U.S. Government's national security and law enforcement concerns," as Global Crossing described it in a public filing to the Securities and Exchange Commission later.