Obama AG Pick Lobbied for Dicey Telco Deal

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.

The company has said that its operations "were generally consistent" with the CFIUS agreement's terms even before it signed the agreement.

But to fully comply with the new arrangement, the company wrote in SEC filings, it made "improvements" to "information storage and management, traffic routing and management, physical, logical, and network security arrangements, personnel screening and training, and other matters."

The 35-page agreement barred the new owners from storing outside the United States information or communications on U.S. persons, barred the company from routing domestic U.S. calls through international pathways under most circumstances, and said it could not share such information with foreign governments without the approval of the Justice Department or a federal judge.

It also gave the company tough rules on reporting contact with foreign executives, screening prospective employees, and opening their facilities for investigation by U.S. personnel.

The document was similar in many respects to a 2001 agreement reached by U.S. telecom firm Voicestream, its German buyer, and federal officials, including Holder.

Holder, who led the process of vetting possible vice-presidential picks for Obama, has faced criticism for his role in then-President Bill Clinton's pardoning of Marc Rich, a fugitive financier and major donor to Clinton's campaigns.

When Holder's likely nomination was reported this week, it was warmly received by Republicans and Democrats. "I respect the man, and I intend to vote for him," said conservative Sen. Orrin Hatch, R-Utah. Senate Judiciary Chairman Patrick J. Leahy, D-Vt., said in a statement Thursday Holder "would make an outstanding and historic nominee." If nominated and approved by the Senate, Holder would be the nation's first African American Attorney General.

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