The political fallout of WorldCom’s demise has been producing more fireworks lately than “The Star-Spangled Banner.”
As the financial community scrambles to recuperate from allegations of cooked books at WorldCom and plunging stock prices, politicians have dealt with the controversial issue in varied ways.
House Minority Leader Richard A. Gephardt (D-Mo.), who has received at least $10,000 in political contributions from WorldCom, said abuses by public companies were the result of an atmosphere created by Republicans after a lengthy campaign to “unwind regulations” and “limit the scrutiny of corporations.”
“That’s typical stuff you get from Gephardt,” said Senate Republican Leader Trent Lott (R-Miss.). “He thinks he’s going to be nominated by his party to be president. He’s certainly not going to get nominated by the National Democratic Party and certainly won’t be president. They want to blame one party or the other on the problems some of these corporations are having. I don’t get it. After all, for the past eight or nine years, Bill Clinton was president of the U.S. He headed all these various departments and agencies.
“Many of our companies in corporate America — small businesses, farmers and truckers, etc. — are over-regulated and overtaxed. But we also have a right and responsibility to demand that companies in America comply with the laws. These violations of auditing principles have come as a surprise and disappointment. We will take a look at those issues and tighten up as we can.”
The investigation into WorldCom’s collapse took center stage on July 8, when the House Committee on Financial Services began its hearings for “Wrong Numbers: The Accounting Problems at WorldCom.” Congressman Ronnie Shows (Miss.-District 4) is the sole Mississippi member of the committee.
Pickering and Shows, both fighting to represent the reconfigured third district, have differed on responses to the debacle and ways to deal with political contributions from WorldCom, which is in Shows’ district until January. Then, it will be located in District 2, represented by Democratic Congressman Bennie Thompson.
Shows has criticized Pickering for not following his lead of returning political contributions to the company or the community. Shows donated the $6,000 he received from WorldCom to a fund set up for the estimated 17,000 WorldCom employees who will lose their job as the corporation begins its restructuring. Pickering did not follow suit.
“Chip just doesn’t get it,” said Troy Colbert, Shows’ press secretary. “Donating the money isn’t an admission of any wrongdoing. It’s simply the right thing to do.”
Pickering spokesman Henry Barbour called Shows’ maneuvering “nothing but a stunt.”
“Leave it to Ronnie Shows — the same man who solicited $84,000 in illegal campaign contributions and just had to pay a $25,000 fine for doing this — to question Chip’s support from WorldCom,” he said. “It is the ultimate in hypocrisy and is directly related to the fact that he cannot defeat Chip Pickering on the issues. I would rather Chip have a legal contribution from WorldCom than the $5,000 that Shows took in from Hillary Clinton.”
Colbert called the response “smoke and mirrors.”
“Chip doesn’t see that donating the money to the innocents in this — the employees and investors — will show the world we’re on their side,” he said. “I think he’s absolutely wrong-headed about it.”
Barbour said Shows has never taken much interest in WorldCom, the lone Fortune 500 company in his district.
“That’s evidenced by the fact that he misspelled WorldCom six times in his press release last week and his support of legislation that WorldCom feared was terrible for its industry,” he said. “But all of a sudden, he’s concerned about the welfare of its employees and Chip is not? Funny thing, only a few months ago in Congress, it was Chip Pickering who fought against the Tauzin/Dingell bill that likely would have provided the final knockout punch to WorldCom had it become law. WorldCom’s No. 1 priority in this Congress was to defeat that bill, so isn’t it odd that ‘Johnny-Come-Lately’ Ronnie Shows was a co-sponsor to the bill that an obviously struggling WorldCom thought would gut its business? Where was Ronnie Shows’ concern for WorldCom employees then?
“Now, Shows has the audacity to attempt to make political hay out of WorldCom’s most difficult times. This is a time to support the company — not political gamesmanship.”
Overall, WorldCom’s support of Republicans has decreased significantly in the last six years. In the four federal election cycles from 1996-2002, the Federal Election Commission reported WorldCom doled out more than $4.27 million in political contributions around the nation. The lion’s share — $1.83 million — was contributed in 1998. In 2000, $1.49 million was given away. In 1996, WorldCom donated $1.27 million, and in 2002, only $804,180.
From 1998 to 2002, GOP contributions dropped from 70% to 46%. Among the recipients: Senate Majority Leader Tom Daschle, (D-S.D.), who has received $31,000 and Thompson, who received $7,500.
Because of Pickering’s perch on the House committee that regulates telecoms, Pickering was the biggest sole beneficiary, with roughly $87,500 from WorldCom, Ebbers and his family.
Ebbers has been involved in state political campaigns. In 1999, Ebbers and other heavyweights, including former Netscape CEO Jim Barksdale and ChemFirst CEO J. Kelley Williams, attended a fundraising reception for Republican gubernatorial candidate Eddie Briggs at the home of J.L. Holloway, who resigned in May as chairman of Gulfport-based Friede Goldman Halter, which filed for bankruptcy protection last year.
In Mississippi, elected state leaders aren’t saying much about political contributions from WorldCom. Phil Kinney, a spokesperson for Gov. Ronnie Musgrove, said no money was received “from WorldCom or any of their associates” during the gubernatorial election in 1999. Lt. Gov. Amy Tuck did not respond to questions about political contributions by press time.
Contact MBJ contributing writer Lynne W. Jeter at (800) 993-3392 or email@example.com</a.