So, ex-WorldCom CEO Bernie Ebbers died on Sunday at age 78. His death wasn’t a complete shock; I saw recently that he was in ill health and was granted an early release from prison after serving 13 years of his 25-year sentence for securities fraud, conspiracy, and filing false reports with regulators.
My mom used to work for MCI, which eventually became WorldCom, in the mid-1990s until she was laid off in June 2001. She really enjoyed working there and I remember her being pretty upset when she was let go. When I talked to her this morning, she told me she had no idea about “that fraud business”—an $11 billion accounting fraud spearheaded by Ebbers and other executives at WorldCom—going down while she worked there.
My only fond memory of her being a WorldCom employee was this cool, navy blue MCI WorldCom hoodie she gave me, which I used to wear all the time. I kinda wish I still had it for nostalgia’s sake.
While I don’t have any ill will toward Ebbers, I’m sure a lot of people still do after all these years—ex-WorldCom employees who lost their jobs and savings because of the fraud; shareholders, including many pension funds, which reportedly lost billions when the company went bankrupt; and maybe even former Arthur Andersen employees.
In a statement, Ebbers’ daughter, Joy Ebbers Bourne, acknowledged the victims of her father’s fraud, which probably isn’t much of a consolation prize for those who got screwed:
“I know many of the victims of WorldCom opposed Dad’s release. Many also wrote in support of release. Many stockholders and employees lost their investments in the fall of WorldCom. Many of our friends — and many in our family — did too. Thankfully, Judge Caproni agreed with us — keeping Dad in prison, especially in his unexplained and undiagnosed deteriorated condition, would not bring back anyone’s investments. My family and I continue to pray for everyone affected by the fall of WorldCom.”
Our friend Jim Peterson, a former attorney for Arthur Andersen and author of Count Down: The Past, Present and Uncertain Future of the Big Four Accounting Firms and DOA: Can Big Audit Survive the UK Regulators?, who retired from Andersen a year before WorldCom crashed, told me because that collapse followed Enron’s, Andersen “was already circling the drain in its own death spiral, so the particulars of the accounting malfeasance at WorldCom were never aired out in public to the extent they were for Ken Lay, [Andrew] Fastow, [Jeffrey] Skilling, and the gang of merry pranksters at Enron.”
“Based on what modest amount is known, the sordid activities at WorldCom were primitive by contrast to the complexities dreamt up by the ‘Smartest Guys in the Room.’ I would speculate that the much lower bar at WorldCom more resembled the story of the guy trying to escape the bear — needing not to be faster than the bear, but only fast enough to outrun the other guy.
“For Ebbers, the same — he didn’t need to be the smartest, just smarter than the guys he was deceiving.”
Bernard Ebbers, WorldCom CEO convicted in historic fraud scandal, dies at 78 [Washington Post]
Bernard Ebbers, former WorldCom CEO who went to prison in massive accounting fraud case, is dead [CNN]