Poor Bernie. In Mississippi business circles, those two words have been uttered in hushed tones more frequently than any other phrase associated with the WorldCom debacle of late concerning former CEO Bernie Ebbers.
Even though most people believe he got what he deserved — a 25-year sentence to begin in October at the low-security portion of the federal prison in Yazoo City — Mississippians are also incredibly sympathetic to his plight. “People will overlook a little abuse, but $11 billion makes it hard for anyone to ignore,” said a friend.
On the surface, most of the shareholder grievances have been covered. Ebbers’ rag-to-riches-to-rags story will end with his wife, Kristie Webb, living in a modest Jackson home with $50,000 spending money.
An overlooked aspect
But throughout the course of the trial, conviction and sentencing, there was little mention of the late John Sidgmore, a pioneer in the technology community who played a key role in revealing the long-distance company’s accounting fraud. He died December 11, 2003, at the age of 52 of kidney failure from complications of acute pancreatitis.
“When I first took this job, my wife said I was a moron,” Sidgmore said in the summer of 2002, when the accounting fraud was made public and the company was filing for bankruptcy protection. In the days before Ebbers resigned, Sidgmore had lobbied hard for the CEO job. After taking the reigns, WorldCom began collapsing around him and he fully realized that he had inherited the worst job in corporate America. A year to the day after the twin towers in New York City collapsed, Sidgmore resigned unnoticed.
vNot much has been said about Michael Capellas, the former Hewlett-Packard and Compaq Computer turnaround wizard who took over as WorldCom CEO less than a year before Sidgmore’s untimely death. Indeed, Capellas has been decidedly low-key, chatting one-on-one only with a chosen few, and recently only about his prime focus for the company now called MCI: providing multi-national corporations with value-added services on the back of its global IP network.
Former WorldCom internal auditor Cynthia Cooper, who left the corporate arena to begin her own consulting firm, has kept a low profile throughout the judicial process.
Why so long?
There’s been a hint of speculation in the media about why Ebbers received the longest sentence yet handed out to an executive convicted in the recent wave of high-profile white-collar crimes, which includes trendsetter Martha Stewart, ex-Tyco International boss Dennis Kozlowski and former Adelphia Communication chiefs John and Timothy Rigas.
Trial appeals by Ebbers and others are viewed as long shots. Are they sacrificial lambs for Texas-based Enron Corporation executives like Kenneth Lay, a friend of President George W. Bush? If so, is it a tactic to publicly flagellate others first? Deflecting attention would benefit some in the Bush Administration, which have ties to the Texas-based corporation.
The first culprits in the bastion against corruption, the 2001 Enron case is the last to go to trial, allegedly because of the complicated house of cards accounting system that prosecutors are plowing through. Timing could work to Lay’s benefit, if public outcry against corporate fraud has been satisfied by the time he faces a jury of his peers.
Ebbers was in the crest of the wave of corporate punishment that HealthSouth CEO Richard Scrushy avoided primarily because he was tried in his hometown. Others have fallen under the radar. In May, the FBI reported 405 corporate fraud cases being pursued across the nation, double the number handled just two years ago.
Timing is everything
Because Ebbers was generous with his time and money to many worthy causes almost to a fault — many people still do not realize the scope of his anonymous generosity — and because despite his rough edges, he was a charming dealmaker, it is difficult not to be sympathetic to his plight.
Nobody wants to see locusts hover overhead indefinitely.
“If you live 60-some-odd years and you have an unblemished record, doesn’t that count, particularly on this day?” asked Ebbers’ attorney, Reid Weingarten, before the July 13 sentencing.
It didn’t matter. Timing is everything. Poor Bernie.
Freelance writer Lynne Jeter writes regularly for the Mississippi Business Journal. She is the author of “Disconnected: Deceit and Betrayal at WorldCom,” published in 2003 by John Wiley & Sons Inc. Contact her at firstname.lastname@example.org.