FOX NEWS ^ | Thursday, January 09, 2003 | O'REILLY FACTOR

BILL O'REILLY, HOST: In the Unresolved Problems segment tonight, the federal government will not bring charges against Global Crossing Chairman Gary Winnick.

On Christmas Eve, Attorney General Ashcroft announced no indictment would be forthcoming. Mr. Ashcroft timed the announcement so few would see or hear it. That's because Winnick is a genuine villain, in my opinion, and most people know it.

He lives on a $100-million estate in Bel Air, California, after taking out $740 million from a company that went bankrupt after that. Winnick's house has 43 room, including 15 bedrooms and 17 baths. Winnick also reportedly owns two other houses in Malibu and another one in Brentwood, as well as yachts and everything else you would expect from a robber baron.

With all this money, Winnick is connected. He has played golf with Bill Clinton and DNC chief Terry McAuliffe. Somehow, after the putting was over, $1 million from Winnick found its way to the Clinton library, and McAuliffe was given the opportunity to invest $100,000 in Global Crossing. He sold his stock for $18 million well before the crash.

In addition, Winnick hired George Bush senior to give a speech and paid him with stock. Mr. Bush cashed out for a reported $4-1/2 million.

With us now in the studio is former federal prosecutor Doug Burns and, from Los Angeles, Brian Lysaght, another former federal prosecutor, who has been closely following the Winnick case.

Were you surprised Ashcroft didn't indict him, Mr. Lysaght?

BRIAN LYSAGHT, ATTORNEY FOR WHISTLEBLOWER: I was shocked. We actually represent Roy Ellison, who's the whistleblower in Global Crossing, and we were expecting an indictment any time. It's just mindboggling.

O'REILLY: What did he do? Tell the folks and me and Mr. Burns what exactly did Winnick do.

LYSAGHT: Well, he cre -- he learned at the knee of Michael Milken. He probably was going to get indicted with Milken except probably turned states evidence when Giuliani indicted Milken.

He started this company, which never made a dime. He had personally made $740 million, as you've mentioned. All his cronies made many, many, many ten of millions of dollars more, and he absolutely crushed the shareholders and 401(k) participants.

And he did it by a very simple accounting fraud, which is known as either Lazy Susan trades or roundtable trades, but essentially illegal swaps.

And the day before the Ashcroft invest -- the Ashcroft announcement on December 24, there was a front-page article in The Wall Street Journal by Dennis Berman talking extensively about the evidence that these swaps were nothing more than pure unadulterated nonsense designed to boost revenues, and it was done across the telecommunications industry, across the Internet industry, and, indeed, across the energy industry by Enron itself.

O'REILLY: So the crime you say he committed is fraud. He basically was basically telling investors --

And I did have some Global Crossing stock, which is recommended by a -- excuse me -- a money manager named John Deschauer (ph), not only recommended but pounded on the table continually by Deschauer (ph), and I foolishly bought the stock.

So you're saying that Winnick all along knew that his company was a shell company, not able to earn legitimate money, and was moving things around to give the appearance of future profit?

LYSAGHT: Yes, especially in the 2000, 2001 time period. Once a fellow by the name of Joseph Pirone (ph), who was the Andersen account executive -- of course, Andersen was the auditors of Global Crossing, like everybody else -- he actually went from Andersen over to Global Crossing and, from our view, orchestrated this entire scam, and...

O'REILLY: All right. I'm going to get to Mr. Burns to reply in a minute, but one more question. Obviously, as we've pointed out -- excuse me again -- Winnick gave big money to important people.

LYSAGHT: Right.

O'REILLY: Bill Clinton, Terry McAuliffe, and George Bush the elder. All right. He gave them big money. There's no disputing that. Everybody knows that. Do you believe that influenced John Ashcroft not to indict him?

LYSAGHT: Well, I'm pretty sure -- it's actually about 55-45 Republicans and Democrats. Everybody has a little tar from that tar baby. But, as far as the indictment itself, it was pretty much handled by the local office out here.

O'REILLY: No, but Ashcroft has to make the call. You know that.

LYSAGHT: And I wish he would. I wish it was...

O'REILLY: But he hasn't and he won't. Now the question is: Was the fix in?

LYSAGHT: Hope springs eternal that Ashcroft is going to change his mind, but I don't know if...

O'REILLY: He's not.

LYSAGHT: You know, I'm a former federal prosecutor. It's inconceivable to me that any prosecutor gets paid off, but it's also inconceivable to me that they're not indicting Winnick. That's just mindboggling.

O'REILLY: Well, why would Ashcroft make the announcement on Christmas Eve? Come on. You know the game.

LYSAGHT: To bury it. To bury it.

O'REILLY: Of course. Of course. Something not right here.

Mr. Burns, why don't you weigh in on this?

DOUG BURNS, FORMER FEDERAL PROSECUTOR: I find this interesting because, normally, the complaint is that prosecutors are overzealous, OK, and, when they're in a high-publicity case against a high-publicity target, they want to put a notch on their belt because...

O'REILLY: It depends who the target is. Ken Lay is still...

BURNS: But what's the complaint here, that they're underzealous? I mean, the point is we don't know...

O'REILLY: The complaint here is the fix might be in because this guy greased two presidents and the head of the DNC.

BURNS: Well, I think our other guest is very careful, obviously, not to, you know, agree with that type of allegation. That's very serious.

O'REILLY: Whoa, whoa, whoa. I'm not making any allegation. I want everybody to be clear. I'm giving you the facts. Big money flowed from Gary Winnick to three very powerful Americans. There's no question about that, all right?

BURNS: Right.

O'REILLY: So you can draw your own conclusions of whether that helped him or not. But you -- are you sticking up for Winnick?

BURNS: Not at all. I'm telling you that federal prosecutors out there, who ordinarily would be quite zealous in this type of case -- I was in a case in Los Angeles myself with that office. They weren't cutting us a lot of slack. They were very aggressive, very competent. And the point I'm trying to make is that you've got to draw some conclusion that they had some problem with the evidence in the case.

O'REILLY: The -- so he didn't do anything wrong?

BURNS: I'm not saying that at all. I mean, people confuse guilt and innocence on the one hand versus provability in court on the other.

O'REILLY: All right. That's a good point.

Mr. Lysaght, is it possible that the U.S. attorney in Los Angeles couldn't get him because he was too smart and used the system to enrich himself and his buddies but didn't really violate any law?

LYSAGHT: No, you could take any one of your viewers off a truck he's driving and put him in as prosecuting this case, and it would be successful. There are e-mails all over the place showing that Winnick had blood on his hands in every single one of these transactions. An infant could try this case successfully.

Now, whether it is a crisis of timidity out here, I don't know. Maybe they think white-collar crime is a bank robbery with a videotape and a note. But this is -- this is actually not much more complicated than that, and this...

O'REILLY: All right. Mr...

LYSAGHT: ... and why they didn't do it is mind -- it's just...

O'REILLY: And, of course, we never get an explanation from John Ashcroft's Justice Department, just as we never got an explanation from Janet Reno's Justice Department. The folks are blind when it comes to justice, which should be blind, but it isn't.

Now, Mr. Lysaght, is -- represents the whistleblower who presented the evidence against Gary Winnick. He says that Barney Fife could make this case. Do you doubt Mr. Lysaght?

BURNS: Well, obviously and unfortunately from his standpoint, there may be some problems with corroborating or backing up the information that was provided. Again, we don't have in front of us, Bill, the memorandum of interviews of witnesses, all of the...

O'REILLY: And we'll never have that.

BURNS: Right, but, again, it's kind of hard to criticize the prosecutorial decision, unless we know what specific information they're looking at, and, again, I want to reiterate that, you know, prosecutors in high-publicity cases -- they want to make the case.

O'REILLY: No, they don't.

BURNS: That's their job.

O'REILLY: See, Mr. Burns, you're living in a land of oz because you're never going to get a Marc Rich pardon investigation -- indictment. You didn't get an indictment against Senator Robert Torricelli. You didn't get an indictment in the vote-buying-in-New-Square/Hillary Clinton case. The powerful protect each other.

Mr. Lysaght, do you see it that way? I believe that the powerful protect each other in this country and that that has something to do with this.

LYSAGHT: No powerful person ever suffered by being powerful.

O'REILLY: OK. I mean, but, in this case, we have so much money taken out of a company that screwed so many working people with their pension plans and everything else, and it looks like Gary Winnick will stay atop his $100-million estate in Bel Air and suffer no consequences.

LYSAGHT: Yes. Like Jabba the Hutt up there looking down on the ashes that he's made of other people's lives.

O'REILLY: All right.

Last word, Mr. Burns?

BURNS: I think, again, we must sort out the difference between guilt and innocence and provability in court. Let's not walk out of this show saying he didn't do anything wrong. That's not the point.

O'REILLY: OK. There we go. Thanks, gentlemen. We appreciate it.

BURNS: My pleasure.