Fortune is out with a story today on California Senate candidate Carly Fiorina (R), reporting that she orchestrated unstable deals in an effort to grow the telecom company she lead in the 1990s as quickly as possible — and make headlines.
Fiorina has run largely on her experience leading Hewlett Packard. But before she joined HP, she worked for a telecom company called Lucent Technologies.Her stint at Lucent is what rocketed her to fame, at least in the business world. The company, which made telecom equipment like fiber optic cable, grew revenues 58% and added 22,000 jobs while Fiorina was there, a success she parlayed into her HP job and then her self-financed run for Senate.
One of her biggest deals at Lucent was one in which a small start-up, PathNet, bought a huge amount of fiber optics — a deal worth between $440 million and $2.1 billion.
But, as Fortune reports, the deal wasn’t a model of stability. PathNet only had some $1.6 million in annual revenue at the time. How did they pay for the equipment? Lucent, Fiorina’s company, loaned them the money.
As Fortune points out, it was a common deal in the heady, easy-credit days of the late-90s telecom industry, before the bubble burst — as it did soon after Fiorina left Lucent.
But Fiorina has since touted her resistance to using irresponsible methods to fuel short-term growth at any cost. A spokeswoman told Fortune their story, which compares Fiorina’s deals to subprime mortgages, “almost libelous.”