WorldCom

By Dennis Moberg (Santa Clara University) and Edward Romar (University of Massachusetts-Boston)

2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of WorldCom not only broke but with a personal net worth as a negative nine-digit number.2 No palace in a gated community, no stable of racehorses or multi-million dollar yacht to show for the telecommunications giant he created. Only debts and red ink--results some consider inevitable given his unflagging enthusiasm and entrepreneurial flair. There is no question that he did some pretty bad stuff, but he really wasn't like the corporate villains of his day: Andy Fastow of Enron, Dennis Koslowski of Tyco, or Gary Winnick of Global Crossing.3

Personally, Bernie is a hard guy not to like. In 1998 when Bernie was in the midst of acquiring the telecommunications firm MCI, Reverend Jesse Jackson, speaking at an all-black college near WorldCom's Mississippi headquarters, asked how Ebbers could afford $35 billion for MCI but hadn't donated funds to local black students. Businessman LeRoy Walker Jr., was in the audience at Jackson's speech, and afterwards set him straight. Ebbers had given over $1 million plus loads of information technology to that black college. "Bernie Ebbers," Walker reportedly told Jackson, "is my mentor."4 Rev. Jackson was won over, but who wouldn't be by this erstwhile milkman and bar bouncer who serves meals to the homeless at Frank's Famous Biscuits in downtown Jackson, Mississippi, and wears jeans, cowboy boots, and a funky turquoise watch to work.

It was 1983 in a coffee shop in Hattiesburg, Mississippi that Mr. Ebbers first helped create the business concept that would become WorldCom. "Who could have thought that a small business in itty bitty Mississippi would one day rival AT&T?" asked an editorial in Jackson, Mississippi's Clarion-Ledger newspaper.5 Bernie's fall-and the company's-was abrupt. In June 1999 with WorldCom's shares trading at $64, he was a billionaire,6 and WorldCom was the darling of the New Economy. By early May of 2002, Ebbers resigned his post as CEO, declaring that he was "1,000 percent convinced in my heart that this is a temporary thing."7 Two months later, in spite of Bernie's unflagging optimism, WorldCom declared itself the largest bankruptcy in American history.8

This case describes three major issues in the fall of WorldCom: the corporate strategy of growth through acquisition, the use of loans to senior executives, and threats to corporate governance created by chumminess and lack of arm's-length dealing. The case concludes with a brief description of the hero of the case-whistle blower Cynthia Cooper.

The Growth Through Acquisition Merry-Go-Round

From its humble beginnings as an obscure long distance telephone company WorldCom, through the execution of an aggressive acquisition strategy, evolved into the second-largest long distance telephone company in the United States and one of the largest companies handling worldwide Internet data traffic.9 According to the WorldCom Web site, at its high point, the company

* Provided mission-critical communications services for tens of thousands of businesses around the world * Carried more international voice traffic than any other company * Carried a significant amount of the world's Internet traffic * Owned and operated a global IP (Internet Protocol) backbone that provided connectivity in more than 2,600 cities and in more than 100 countries * Owned and operated 75 data centers�on five continents. [Data centers provide hosting and allocation services to businesses for their mission-critical business computer applications.]10

WorldCom achieved its position as a significant player in the telecommunications industry through the successful completion of 65 acquisitions.11 Between 1991 and 1997, WorldCom spent almost $60 billion in the acquisition of many of these companies and accumulated $41 billion in debt.12 Two of these acquisitions were particularly significant. The MFS Communications acquisition enabled WorldCom to obtain UUNet, a major supplier of Internet services to business, and MCI Communications gave WorldCom one of the largest providers of business and consumer telephone service. By 1997, WorldCom's stock had risen from pennies per share to over $60 a share.13 Through what appeared to be a prescient and successful business strategy at the height of the Internet boom, WorldCom became a darling of Wall Street. In the heady days of the technology bubble Wall Street took notice of WorldCom and its then visionary CEO, Bernie Ebbers. This was a company "on the move," and Wall Street investment banks, analysts and brokers began to discover WorldCom's value and make "strong buy recommendations" to investors.

As this process began to unfold, the analysts' recommendations, coupled with the continued rise of the stock market, made WorldCom stock desirable, and the market's view of the stock was that it could only go up. As the stock value went up, it was easier for WorldCom to use stock as the vehicle to continue to purchase additional companies. The acquisition of MFS Communications and MCI Communications were, perhaps, the most significant in the long list of WorldCom acquisitions. With the acquisition of MFS Communications and its UUNet unit, "WorldCom (s)uddenly had an investment story to offer about the value of combining long distance, local service and data communications."14 In late 1997, British Telecommunications Corporation made a $19 billion bid for MCI. Very quickly, Ebbers made a counter offer of $30 billion in WorldCom stock. In addition, Ebbers agreed to assume $5 billion in MCI debt, making the deal $35 billion or 1.8 times the value of the British Telecom offer. MCI took WorldCom's offer making WorldCom a truly significant global telecommunications company.15

All this would be just another story of a successful growth strategy if it weren't for one significant business reality--mergers and acquisitions, especially large ones, present significant managerial challenges in at least two areas. First, management must deal with the challenge of integrating new and old organizations into a single smoothly functioning business. This is a time-consuming process that involves thoughtful planning and considerable senior managerial attention if the acquisition process is to increase the value of the firm to both shareholders and stakeholders. With 65 acquisitions in six years and several of them large ones, WorldCom management had a great deal on their plate. The second challenge is the requirement to account for the financial aspects of the acquisition. The complete financial integration of the acquired company must be accomplished, including an accounting of assets, debts, good will and a host of other financially important factors. This must be accomplished through the application of generally accepted accounting practices (GAAP).

WorldCom's efforts to integrate MCI illustrate several areas senior management did not address well. In the first place, Ebbers appeared to be an indifferent executive who "paid scant attention to the details of operations."16; For example, customer service deteriorated. One business customer's service was discontinued incorrectly, and when the customer contacted customer service, he was told he was not a customer. Ultimately, the WorldCom representative told him that if he was a customer, he had called the wrong office because the office he called only handled MCI accounts.17 This poor customer stumbled "across a problem stemming from WorldCom's acquisition binge: For all its talent in buying competitors, the company was not up to the task of merging them. Dozens of conflicting computer systems remained, local systems were repetitive and failed to work together properly, and billing systems were not coordinated."18

Poor integration of acquired companies also resulted in numerous organizational problems. Among them were:

* Senior management made little effort to develop a cooperative mindset among the various units of WorldCom. * Inter-unit struggles were allowed to undermine the development of a unified service delivery network. * WorldCom closed three important MCI technical service centers that contributed to network maintenance only to open twelve different centers that, in the words of one engineer, were duplicate and inefficient. * Competitive local exchange carriers (Clercs) were another managerial nightmare. WorldCom purchased a large number of these to provide local service. According to one executive, "(t)he WorldCom model was a vast wasteland of Clercs, and all capacity was expensive and very underutilized�There was far too much redundancy, and we paid far too much to get it."19

Regarding financial reporting, WorldCom used a liberal interpretation of accounting rules when preparing financial statements. In an effort to make it appear that profits were increasing, WorldCom would write down in one quarter millions of dollars in assets it acquired while, at the same time, it "included in this charge against earnings the cost of company expenses expected in the future. The result was bigger losses in the current quarter but smaller ones in future quarters, so that its profit picture would seem to be improving."20 The acquisition of MCI gave WorldCom another accounting opportunity. While reducing the book value of some MCI assets by several billion dollars, the company increased the value of "good will," that is, intangible assets-a brand name, for example-by the same amount. This enabled WorldCom each year to charge a smaller amount against earnings by spreading these large expenses over decades rather than years. The net result was WorldCom's ability to cut annual expenses, acknowledge all MCI revenue and boost profits from the acquisition.

WorldCom managers also tweaked their assumptions about accounts receivables, the amount of money customers owe the company. For a considerable time period, management chose to ignore credit department lists of customers who had not paid their bills and were unlikely to do so. In this area, managerial assumptions play two important roles in receivables accounting. In the first place, they contribute to the amount of funds reserved to cover bad debts. The lower the assumption of non-collectable bills, the smaller the reserve fund required. The result is higher earnings. Secondly, if a company sells receivables to a third party, which WorldCom did, then the assumptions contribute to the amount or receivables available for sale.21

So long as there were acquisition targets available, the merry-go-round kept turning, and WorldCom could continue these practices. The stock price was high, and accounting practices allowed the company to maximize the financial advantages of the acquisitions while minimizing the negative aspects. WorldCom and Wall Street could ignore the consolidation issues because the new acquisitions allowed management to focus on the behavior so welcome by everyone, the continued rise in the share price. All this was put in jeopardy when, in 2000, the government refused to allow WorldCom's acquisition of Sprint. The denial stopped the carousel, put an end to WorldCom's acquisition-without-consolidation strategy and left management a stark choice between focusing on creating value from the previous acquisitions with the possible loss of share value or trying to find other creative ways to sustain and increase the share price.

In July 2002, WorldCom filed for bankruptcy protection after several disclosures regarding accounting irregularities. Among them was the admission of improperly accounting for operating expenses as capital expenses in violation of generally accepted accounting practices (GAAP). WorldCom has admitted to a $9 billion adjustment for the period from 1999 thorough the first quarter of 2002.

Sweetheart Loans To Senior Executives

Bernie Ebbers' passion for his corporate creation loaded him up on common stock. Through generous stock options and purchases, Ebbers' WorldCom holdings grew and grew, and he typically financed these purchases with his existing holdings as collateral. This was not a problem until the value of WorldCom stock declined, and Bernie faced margin calls (a demand to put up more collateral for outstanding loans) on some of his purchases. At that point he faced a difficult dilemma. Because his personal assets were insufficient to meet the call, he could either sell some of his common shares to finance the margin calls or request a loan from the company to cover the calls. Yet, when the board learned of his problem, it refused to let him sell his shares on the grounds that it would depress the stock price and signal a lack of confidence about WorldCom's future.22

Had he pressed the matter and sold his stock, he would have escaped the bankruptcy financially whole, but Ebbers honestly thought WorldCom would recover. Thus, it was enthusiasm and not greed that trapped Mr. Ebbers. The executives associated with other corporate scandals sold at the top. In fact, other WorldCom executives did much, much better than Ebbers did.23 Bernie borrowed against his stock. That course of action makes sense if you believe the stock will go up, but it's the road to ruin if the stock goes down. Unlike the others, he intended to make himself rich taking the rest of the shareholders with him. In his entire career, Mr. Ebbers sold company shares only half a dozen times. Detractors may find him irascible and arrogant, but defenders describe him as a principled man.24

The policy of boards of directors authorizing loans for senior executives raises eyebrows. The sheer magnitude of the loans to Ebbers was breathtaking. The $341 million loan the board granted Mr. Ebbers is the largest amount any publicly traded company has lent to one of its officers in recent memory.25 Beyond that, some question whether such loans are ethical. "A large loan to a senior executive epitomizes concerns about conflict of interest and breach of fiduciary duty," said former SEC enforcement official Seth Taube.26 Nevertheless, 27percent of major publicly traded companies had loans outstanding for executive officers in 2000 up from 17percent in 1998 (most commonly for stock purchase but also home buying and relocation). Moreover, there is the claim that executive loans are commonly sweetheart deals involving interest rates that constitute a poor return on company assets. WorldCom charged Ebbers slightly more than 2percent interest, a rate considerably below that available to "average" borrowers and also below the company's marginal rate of return. Considering such factors, one compensation analyst claims that such lending "should not be part of the general pay scheme of perks for executives�I just think it's the wrong thing to do."27

What's a Nod or Wink Among Friends?

In the autumn of 1998, Securities and Exchange Commission Chairman Arthur Levitt Jr. uttered the prescient criticism, "Auditors and analysts are participants in a game of nods and winks."28 It should come as no surprise that it was Arthur Andersen that endorsed many of the accounting irregularities that contributed to WorldCom's demise.29 Beyond that, however, were a host of incredibly chummy relationships between WorldCom's management and Wall Street analysts.

Since the Glass-Steagall Act was repealed in 1999, financial institutions have been free to offer an almost limitless range of financial services to their commercial and investment clients. Citigroup, the result of the merger of Citibank and Travelers Insurance Company, which owned the investment bank and brokerage firm Solomon Smith Barney, was an early beneficiary of investment deregulation. Citibank regularly dispensed cheap loans and lines of credit as a means of attracting and rewarding corporate clients for highly lucrative work in mergers and acquisitions. Since WorldCom was so active in that mode, their senior managers were the targets of a great deal of influence peddling by their banker, Citibank. For example, Travelers Insurance, a Citigroup unit, lent $134 million to a timber company Bernie Ebbers was heavily invested in. Eight months later, WorldCom chose Salomon Smith Barney, Citigroup's brokerage unit, to be the lead underwriter of $5 billion of its bond issue.30

But the entanglements went both ways. Since the loan to Ebbers was collateralized by his equity holdings, Citigroup had reason to prop up WorldCom stock. And no one was better at that than Jack Grubman, Salomon Smith Barney's telecommunication analyst. Grubman first met Bernie Ebbers in the early 1990s when he was heading up the precursor to WorldCom, LDDS Communications. The two hit it off socially, and Grubman started hyping the company. Investors were handsomely rewarded for following Grubman's buy recommendations until stock reached its high, and Grubman rose financially and by reputation. In fact, Institutional Investing magazine gave Jack a Number 1 ranking in 1999,31 and Business Week labeled him "one of the most powerful players on Wall Street.32

The investor community has always been ambivalent about the relationship between analysts and the companies they analyze. As long as analyst recommendations are correct, close relations have a positive insider quality, but when their recommendations turn sour, corruption is suspected. Certainly Grubman did everything he could to tout his personal relationship with Bernie Ebbers. He bragged about attending Bernie's wedding in 1999. He attended board meeting at WorldCom's headquarters. Analysts at competing firms were annoyed with this chumminess. While the other analysts strained to glimpse any tidbit of information from the company's conference call, Grubman would monopolize the conversation with comments about "dinner last night."33

It is not known who picked up the tab for such dinners, but Grubman certainly rewarded executives for their close relationship with him.34 Both Ebbers and WorldCom CFO Scott Sullivan were granted privileged allocations in IPO (Initial Public Offering) auctions. While the Securities and Exchange Commission allows underwriters like Salomon Smith Barney to distribute their allotment of new securities as they see fit among their customers, this sort of favoritism has angered many small investors. Banks defend this practice by contending that providing high-net-worth individuals with favored access to hot IPOs is just good business.35 Alternatively, they allege that greasing the palms of distinguished investors creates a marketing "buzz" around an IPO, helping deserving small companies trying to go public get the market attention they deserve.36 For the record, Mr. Ebbers personally made $11 million in trading profits over a four-year period on shares from initial public offerings he received from Salomon Smith Barney.37 In contrast, Mr. Sullivan lost $13,000 from IPOs, indicating that they were apparently not "sure things."38

There is little question but that friendly relations between Grubman and WorldCom helped investors from 1995 to 1999. Many trusted Grubman's insider status and followed his rosy recommendations to financial success. In a 2000 profile in Business Week, he seemed to mock the ethical norm against conflict of interest: "What used to be a conflict is now a synergy," he said at the time. "Someone like me would have been looked at disdainfully by the buy side 15 years ago. Now they know that I'm in the flow of what's going on."39 Yet, when the stock started cratering later that year, Grubman's enthusiasm for WorldCom persisted. Indeed, he maintained the highest rating on WorldCom until March 18, 2002, when he finally raised its risk rating. At that time, the stock had fallen almost 90 percent from its high two years before. Grubman's mea culpa to clients on April 22 read, "In retrospect the depth and length of the decline in enterprise spending has been stronger and more damaging to WorldCom than we even anticipated."40 An official statement from Salomon Smith Barney two weeks later seemed to contradict the notion that Grubman's analysis was conflicted: "Mr. Grubman was not alone in his enthusiasm for the future prospects of the company. His coverage was based purely on information yielded during his analysis and was not based on personal relationships."41 Right.

On August 15, 2002, Jack Grubman resigned from Salomon where he had made as much as $20 million/year. His resignation letter read in part, "I understand the disappointment and anger felt by investors as a result of [the company's] collapse, I am nevertheless proud of the work I and the analysts who work with me did."42 On December 19, 2002, Jack Grubman was fined $15 million and was banned from securities transactions for life by the Securities and Exchange Commission for such conflicts of interest.

The media vilification that accompanies one's fall from power unearthed one interesting detail about Grubman's character-he repeated lied about his personal background. A graduate of Boston University, Mr. Grubman claimed a degree from MIT. Moreover, he claimed to have grown up in colorful South Boston, while his roots were actually in Boston's comparatively bland Oxford Circle neighborhood.43 What makes a person fib about his personal history is an open question. As it turns out, this is probably the least of Jack Grubman's present worries. New York State Controller H. Carl McCall sued Citicorp, Arthur Andersen, Jack Grubman, and others for conflict of interest. According to Mr. McCall, "This is another case of corporate coziness costing investors billions of dollars and raising troubling questions about the integrity of the information investors receive."44

The Hero of the Case

No integrity questions can be raised about Cynthia Cooper whose careful detective work as an internal auditor at WorldCom exposed some of the accounting irregularities apparently intended to deceive investors. Originally assigned responsibilities in operational auditing, Cynthia and her colleagues grew suspicious of a number of peculiar financial transactions and went outside their assigned responsibilities to investigate. What they found was a series of clever manipulations intended to bury almost $4 billion in misallocated expenses and phony accounting entries.45

A native of Clinton, Mississippi, where WorldCom's headquarters was located, Ms. Cooper conducted her detective work was in secret, often late at night to avoid suspicion. The thing that first aroused her curiosity came in March 2002 when a senior line manager complained to her that her boss, CFO Scott Sullivan, had usurped a $400 million reserve account he had set aside as a hedge against anticipated revenue losses. That didn't seem kosher, so Cooper inquired of WorldCom's accounting firm, Arthur Andersen. They brushed her off, and Ms. Cooper decided to press the matter with the board's audit committee. That put her in direct conflict with her boss, Sullivan, who ultimately backed down. The next day, however, he warned her to stay out of such matters.

Undeterred and emboldened by the knowledge that Andersen had been discredited by the Enron case and that the SEC was investigating WorldCom, Cynthia decided to continue her investigation. Along the way, she learned of a WorldCom financial analyst who was fired a year earlier for failing to go along with accounting chicanery.46 Ultimately, she and her team uncovered a $2 billion accounting entry for capital expenditures that had never been authorized. It appeared that the company was attempting to represent operating costs as capital expenditures in order to make the company look more profitable. To gather further evidence, Cynthia's team began an unauthorized search through WorldCom's computerized accounting information system. What they found was evidence that fraud was being committed. When Sullivan heard of the ongoing audit, he asked Cooper to delay her work until the third quarter. She bravely declined. She went to the board's audit committee and in June, Scott Sullivan and two others were terminated. What Ms. Cooper had discovered was the largest accounting fraud in U.S. history.47

As single-minded as Cynthia Cooper appeared during this entire affair, it was an incredibly trying ordeal. Her parents and friends noticed that she was under considerable stress and was losing weight. According to the Wall Street Journal, she and her colleagues worried "that their findings would be devastating to the company [and] whether their revelations would result in layoffs and obsessed about whether they were jumping to unwarranted conclusions that their colleagues at WorldCom were committing fraud. Plus, they feared that they would somehow end up being blamed for the mess."48

It is unclear at this writing whether Bernie Ebbers will be held responsible for the accounting irregularities that brought down his second in command. Jack Grubman's final legal fate is also unclear. While the ethical quality of enthusiasm and sociability are debatable, the virtue of courage is universally acclaimed, and Cynthia Cooper apparently has it. Thus, it was not surprising that on December 21, 2002, Cynthia Cooper was recognized as one of three "Persons of the Year" by Time magazine.

Footnotes

1. Copyright © 2003 by Dennis Moberg, Santa Clara University and Edward Romar, University of Massachusetts-Boston. Reprinted with permission. This case was made possible by a Hackworth Faculty Research Grant from the Markkula Center for Applied Ethics, Santa Clara University. Back

2. This is only true if he is liable for the loans he was given by WorldCom. If he avoids those somehow, his net worth may be plus $8.4 million according to the Wall Street Journal (see S. Pulliam & J. Sandberg [2002]. WorldCom Seeks SEC Accord As Report Claims Wider Fraud [November 5], A-1). Back

3. Colvin, G. (2002). Bernie Ebbers' Foolish Faith. Fortune, 146, (11 [November 25]), 52. Back

4. Padgett, T., & Baughn, A. J. (2002). The Rise and Fall of Bernie Ebbers. Time, 159, (19 [May 12]), 56+. Back

5. Morse, D., & Harris, N. (2002). In Mississippi, Ebbers is a Man to be Proud Of. Wall Street Journal, May 2, 2002, B-1. Back

6. Young, S., & Solomon, D. (2002). WorldCom Backs Chief Executive For $340 Million. Wall Street Journal (February 8), B-1. Back

7. Ibid. Back

8. Romero, Simon, & Atlas, Rava D. (2002). WorldCom's Collapse: The Overview. New York Times (July 22), A-1. Back

9. Ibid. Back

10. WorldCom website, (www.worldcom.com/global/about/facts/). Back

11. Eichenwald, Kurt (2002). For WorldCom, Acquisitions Were Behind its Rise and Fall, New York Times (August 8), A-1. Back

12. Romero & Atlas, op. cit. Back

13. Browning, E. S. (1997). Is the Praise for WorldCom Too Much? Wall Street Journal (October 8), p. C-24. All acquisition amounts are taken from this article. Back

14. Eichenwald, Op. cit., p. A-3. Back

15. Ibid. Back

16. Ibid. Back

17. Ibid., p. A-2. Back

18. Ibid. p. A-4. Back

19. Ibid. p. A-5. Back

20. Ibid., p. A-4. Back

21. Ibid., p. A-5; Sender, Henry (2002), Inside the WorldCom Numbers Factory, Wall Street Journal (August 21), C-1. Back

22. Solomon, D., & Blumenstein, R. (2002). Telecom: Mississippi blues: Loans Proved to be Ebber's Downfall. Wall Street Journal (May 1), A-8. Back

23. According to David Leonhardt of the New York Times (8/25/02, p. 10), Director Francesco Galesi made $31 million, John Sidgmore, the senior manager who replaced Ebbers as CEO, made $25 million, and CFO Scott Sullivan, who many think was responsible for the accounting abuses at World Com, pocketed $23 million. Back

24. Sandberg, J. (2002). Bernie Ebbers Bet the Ranch-Really-on WorldCom stock. Wall Street Journal (April 14), A-13. Back

25. Solomon, D., & Sandberg, J. (2002). Leading the News. Wall Street Journal (November 6). A-3. Report that Bernie used 8% of this load for personal use, an uncharacteristically self-serving move for Mr. Ebbers. Back

26. Young, S. (2002). Big WorldCom Loan May Have Spurred Inquiry. Wall Street Journal (March 14), A-3. Back

27. Lublin, J. S., & Young, S. (2002). WorldCom Loan to CEO of $341 Million is the Most Generous in Recent Memory. Wall Street Journal (March 15), A-4. Back

28. Byrne, J. A. (2002). Fall from grace: Joe Berardino Presided Over the Biggest Accounting Scandals Ever and the Demise of a Legendary Firm. Business Week (August 12), 50+. Back

29. These amounted to over $9 million in overstated income. For an explanation as to how some of this was done, see. Elstrom, P. (2002). How to Hide $3.8 billion in Expenses. Business Week (July 8), 41+. Back

30. Morgenson, G. (2002). More Clouds Over Citigroup in its Dealings with Ebbers. New York Times (November 3), 1. Back

31. Smith, R., & Solomon, D. (2002). Heard on the Street. Ebber's Exit Hurts WorldCom's Biggest Fan. Wall Street Journal (May 3), C-1. Back

32. Rosenbush, S. (2002). Inside the Telecom Game. Business Week (August 5), p. 34+. Back

33. Ibid. Back

34. On December 20, 2002, Jack Grubman was fined $15 million and was banned for securities transactions for life by the Securities and Exchange Commission for such conflicts of interest. Back

35. Editors. (2002). Citi Defends IPO Allocations to Shamed WorldCom Execs. Euroweek (August 30), 18. Back

36. Murray, A. (2002). Political Capital: Let Capital Markets, Not Financial Firms, Govern Fate of IPOs. Wall Street Journal (September 10), A-4. Back

37. Craig, S. (2002). Offerings Were Easy Money for Ebbers. Wall Street Journal (September 3), C-1. Back

38. Ibid. Back

39. Rosenbush, op. cit., 34. Back

40. Smith, op. cit., C-1. Back

41. Ibid. Back

42. Editors. (2002). Salomon's Jack Grubman Resigns. United Press International (August 15), 10082777w0186. Back

43. Rosenbush, op. cit., 34. Back

44. Weil, J. (2002). Leading the News: An Ebbers' Firm Got Citigroup loans. Wall Street Journal (October 14), A-3. Back

45. Pelliam, S. (2002). Questioning the Books: WorldCom Memos Suggest Plan to Bury Financial Misstatements. Wall Street Journal (July 9), A-8. Back

46. Orey, M. (2002). Career Journal: WorldCom-Inspired 'Whistle-Blower' Law has Weaknesses. Wall Street Journal (October 1), B-1. Back

47. Colvin, G. (2002). Wonder Women of Whistleblowing. Fortune (August 12), 56+. Back

48. Pelliam, S., & Solomon, D. (2002). Uncooking the Books: How Three Unlikely Sleuths Discovered Fraud at WorldCom. Wall Street Journal (October 30), A-1. Back