Ex-WorldCom Boss takes the fifth; Refuses to answer any questions in $4B scandal
Copyright 2002 Sun Media Corporation
The Toronto Sun…07/09/2002
Invoking his Fifth Amendment constitutional right against self-incrimination, WorldCom 's former chief executive refused to answer questions yesterday from a U.S. congressional panel investigating nearly $4 billion U.S. in accounting irregularities at the telecommunications giant.
"I do not believe I have anything to hide in these or any other proceedings," Canadian-born Bernard Ebbers told the House financial services committee.
He said he'd been advised by his Washington lawyer to remain silent.
WorldCom's former chief financial officer, Scott Sullivan, also refused to testify on "advice of counsel."
John Sidgmore, WorldCom's president and CEO, blamed the company's former management — including Sullivan and Ebbers — for the accounting problems.
WorldCom chairman Bert Roberts called the accounting improprieties "an outrage," and said auditor Arthur Andersen was responsible.
Melvin Dick, the senior Andersen audit partner for WorldCom, testified that no member of the Andersen team "had any inkling" of the improper accounting.
WorldCom is the latest major corporation to face allegations of executive wrongdoing and accounting irregularities — driving down public confidence in the stock market.
Congress already is investigating the bankruptcies of Enron Corp. and telecommunications company Global Crossing and the role played by accounting firms. Andersen has been convicted of obstruction of justice for destroying Enron-related documents.
In an attempt to boost sagging investor confidence, U.S. President George W. Bush is proposing tougher penalties — including jail time — for corporate officials who lie on financial statements, an administration official said yesterday.
WorldCom, whose interests include No. 2 long-distance telephone company MCI, is battling to avoid bankruptcy after disclosing that it disguised $3.9 billion of expenses as capital expenditures to appear more profitable.
The Securities and Exchange Commission has filed a civil fraud suit against WorldCom, and the Nasdaq stock market plans to delist the company's shares, which have plunged from more than $63 in June 1999 to 22 cents yesterday.