Global Crossing Chief Puts Money Where His Mouth Was

December 19, 2002 ( - Global Crossing chairman Gary Winnick said he has contributed $25 million to the company's 401(k) plan participants to help make up for some of their lost retirement savings.

According to a Wall Street Journal report, the Winnick contribution represented employees’ retirement savings from the firm’s merger with Frontier Corp. in October 1999 to Global’s Chapter 11 bankruptcy filing in January 2002.

Winnick had originally hoped to fund the money through the 401(k) plan, which would have shielded employees from paying taxes. But it now appears that employees will be taxed on Winnick’s donations, the Journal said.

A spokesman for Winnick said he intends to distribute the money “as soon as possible.” It isn’t clear how many current and former employees will receive a piece of Winnick’s funds, the Journal said.  

Winnick pledged to make the contribution in front of a congressional committee investigating the firm. (See  Global Crossing Head Willing to Make Up – Some – 401(k) Losses ).

Global Crossing also faces separate civil and criminal investigations by the US Securities and Exchange Commission and Justice Department.

Winnick is under investigation for his sale of $124 million in company stock in May 2001.