How do I resolve the two faces of Bernie Ebbers?
I was stunned. Certain that Ebbers bore some responsibility for the WorldCom debacle but unsure of his specific role, I still thought he would find a way out of the ashes of his company. After all, this man was a legend.
Success came late in life for him and gave all aging Baby Boomers hope that our best years were yet to come. Stories of the business plan on the napkin circulated these parts like an Aesop fable. His generosity was unmatched, giving to his hometown, Brookhaven, and giving to his alma mater, Mississippi College. He put us on the map and showed the world that Mississippi could be innovative. Mississippi could be business savvy. Mississippi could beat the Harvard boys at their own game. Who wouldn’t love that?
We also knew of his old pickup truck and his stint in the double-wide trailer. We liked that he wore cowboy boots and flew coach. We especially liked that he taught Sunday School. A Canadian who experienced conversion at a Baptist college ends up taking on a Southern persona and taking on the world at the same time.
Up close with big business
I attended many of the WorldCom annual meetings. It was a chance to see big business up close and personal. Bernie was at his best in that setting. He made the rounds, meeting and greeting, while all eyes stayed on him. Everyone wanted his attention. Everyone wanted to shake his hand, this hand of gold. He was the star, and he loved it.
I cringed when he started the meeting with a prayer that could be summarized, “Thank you God for making me rich,” but it fit the Old Testament view that righteousness and wealth were one and the same. For the faithful in that room, it was almost as if a light shone down from heaven, and they could see the dove descending.
I confess that I found myself dazzled on more than one occasion. He was a powerful presence. But I also saw cracks in the image. If the sound or slides for his presentation didn’t work well, the employees standing around the wall stiffened. You knew someone would pay for this error. His demeanor was different when dealing with employees than when dealing with shareholders, markedly different.
I also cringed when he put up his favorite slide, the one which showed how much better WorldCom’s stock was than AT&T. He always had the whole room laughing at that one. Look at those poor AT&T shareholders. What losers! And what a winner he was! His pride was consuming.
Asking a simple question
After the annual business was finished and Bernie’s presentation was complete, he called for questions from the floor.
My knees always knocked when I stood for a question. There were things I needed to know, but I also knew it was dangerous to “question the man.” Upon the announcement of the MCI merger, I asked about the solvency of one of MCI’s businesses, UUNET. This was an Internet division which showed huge losses on the bottom line and required huge cash inflows to fuel its growth. How would WorldCom absorb these losses? Ebbers looked, no stared, at me, and without blinking an eye said, “They don’t have any losses.” My mouth dropped. I looked back at the financials with red bleeding all over the page. He was so certain that I began to wonder if I had been given the wrong reports.
Through the years, I watched as WorldCom ate up more and more companies. Former CEOs were taken within the ranks of the Mississippi group without hesitation. Note that many of these guys had questionable records and were known to have questionable business practices. I wondered who would convert who. In public settings, he praised Scott Sullivan. Sullivan was his right hand man, but it was made clear that Ebbers was still the star of the show.
It was the peak of the Internet bubble, and WorldCom, and Ebbers, were riding high. How can you doubt success? It just seemed like we were all on a wild ride, traveling at lightning speed. WorldCom moved its headquarters to Clinton, and my small town was exuberant. This was bigger than big!
When it all falls apart…
When news of the fraud hit and Ebbers resigned, he maintained his innocence. He stood in his church and declared it so. He gave an interview to Bert Case on WLBT, saying his faith would get him through. I saw in his eyes a sincerity.
When I thought back to the Old Testament philosophy, I could see that Ebbers might think of himself as Job, the one righteous man who is being tested by God by having everything taken away. As he sat in that courtroom waiting for a verdict, was he waiting for redemption? Would the hand of God save him from the evil around him, or would he have to pay the piper?
And all I could feel was a deep sense of sadness. Money was lost. Reputations were shattered. Mississippi got shoved back to the bottom of the ladder. And small-town Clinton was back to being small time.
Oh, Mr. Ebbers, who is to blame? Only you and God know the answer to that one.
Nancy Lottridge Anderson, CFA, is president of New Perspectives Inc. in Clinton. Her e-mail address is firstname.lastname@example.org, and she’s online at www.newper.com.