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WorldCom's Sullivan Alleges Ebbers Knew of Irregularities
Updated: Thursday, July 11, 2002 07:48 PM ET Printer-friendly version
WASHINGTON -- Congressional investigators probing the WorldCom Inc. scandal say that former Chief Financial Officer Scott Sullivan has told the company's internal investigators that former CEO Bernie Ebbers knew that Mr. Sullivan was artificially inflating the company's earnings.
The WorldCom investigators said that Mr. Sullivan told them, "Ebbers was aware that hundreds of millions of dollars had been moved" into capital expenditure accounts that wouldn't impact the company's earnings, according to Ken Johnson, a spokesman for House Energy and Commerce Committee Chairman W.J. "Billy" Tauzin (R., news, msgs, La.), who is leading the probe into WorldCom's apparent fraud and subsequent collapse along with Rep. James Greenwood (R., news, msgs, Pa.).
The disclosure will be a blow to Mr. Ebbers, who is already facing numerous federal probes as well as congressional heat over his controversial appearance before a House panel earlier week. The disclosure may also signal a rift between the two men, once close friends and colleagues, as each tries to save himself from legal punishment.
"This is first evidence we have seen showing that the muddy little footprints may lead back to Bernie Ebbers's doorstep," Mr. Johnson said. "Clearly there's evidence that people at WorldCom knew someone was cooking the books."
Mr. Johnson also said that the WorldCom investigators turned over five large boxes of internal company documents, which congressional investigators have just begin to sift through.
On Monday, tempers flared at a meeting of the House Financial Services committee when Mr. Ebbers chose to make a short statement professing his innocence before invoking the Fifth Amendment right of the Constitution to protect against self-incrimination.
"I do not believe I have anything to hide in these or any other proceedings," Mr. Ebbers declared. He said he hasn't received any details of what happened and hasn't been advised that he had done anything wrong. When all is said and done, "No one will conclude that I engaged in any criminal conduct or fraud," he said.
Mr. Ebbers then took the Fifth and refused to answer any more questions. Some congressmen said his statement constituted a waiver and said they had the right to call him back as a witness. |
