The former top executives at WorldCom ruled with unquestioned authority, steering the telecommunications company into multibillion-dollar acquisitions on a whim and intimidating underlings who questioned their conduct, according to two reports released Monday.
A report by former Attorney General Richard Thornburgh outlined a corporate culture thoroughly dominated by former Chairman Bernard Ebbers and ex-Chief Financial Officer Scott Sullivan, fostering an environment that led to the largest U.S. bankruptcy and an $11 billion accounting scandal.
A second investigative document, produced by lawyer William McLucas at the request of the company's new board, offered searing details about how Sullivan and other key finance executives cooked WorldCom's books to hide that the real numbers were falling short of Wall Street's expectations.
In one incident cited by the investigators, accounting executive Buford Yates told an underling who questioned the company's books, "Show those numbers to the damn auditors and I'll throw you out the (expletive) window."
Just how ineffectual a business was Worldcom? Besides those whimsical multibillion dollar acquisitions, there were also whimsical investments in the Trent Lott Leadership Institute (Guardian):
WorldCom's gala contribution [$100,000 to the Republicans at a fundraising gala attended by President Bush] was a routine part of its $3m a year lobbying effort in Washington, aimed at influencing tax policy and the planned deregulation of the long-distance telephone market – legislation to which WorldCom is opposed.
The company focused on cultivating Mississippi politicians, particularly the Republican leader in the Senate, Trent Lott.
Three years ago WorldCom contributed $1m to the University of Mississippi to help set up the Trent Lott Leadership Institute, just a few weeks after the Mississippi senator had appointed a company official to an advisory panel on the issue of taxing internet sales.
Another recipient of WorldCom largesse was the attorney general, John Ashcroft, who took $10,000 in contributions from the firm for his 2000 Senate campaign. It was unclear yesterday whether Mr Ashcroft would excuse himself from the investigation of WorldCom, as he had done in the case of Enron, another campaign contributor.
Cowards, liars and thieves, every one of them. Like "military intelligence" of the Vietnam era, "corporate culture" is the signal oxymoron of our (expletive) times.
