Telecom Drudgery

Some folks hate Matt Drudge and The Drudge Report. Others lionize him. But no matter what they may think of him, lots of folks in Washington read him. When he latches onto a story, it often makes headlines.

This may mean a headache for Global Crossing and the telecom sector. Drudge is focusing on Democratic rainmaker Terry McAuliffe's relationship with GX, and drawing comparisons to the Enron scandal. Will Drudge's attention complicate Global's efforts to restructure? It might, and here's why:

Some of Drudge's most attentive readers are journalists covering national politics. They remember the Lewinsky scandal, when the Drudge Report broke many of the most sordid stories -which we then saw and heard on CNN, MSNBC and the major networks shortly thereafter.

Drudge's attention to McAuliffe's Global Crossing ties is likely to prompt close scrutiny from Washington investigative reporters, not to mention members of Congress. Drudge can count on a steady stream of information from GOP strategists eager to deflect attention from Bush administration ties to Enron - who appear to be his primary sources on his initial story on McAuliffe. Journalists who have written about Bush-Enron connections will be reminded of their obligation to work both sides of the street.

If Global Crossing's bankruptcy becomes politicized, the role of foreign investors will be closely scrutinized, which will further complicate the challenge the company faces.

The next few days will likely tell us whether this story has "got legs," as they say in the news business. If it does, we may see the Global Crossing case kicked around on the national stage.