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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (2543)	11/12/2002 8:40:26 AM
From: Glenn Petersen	Read Replies (2) \| Respond to of 3602

WorldCom’s Sullivan nears plea deal Ex-finance chief may cooperate with government probe By Deborah Solomon THE WALL STREET JOURNAL msnbc.com Nov. 12 — WorldCom Inc.’s former finance chief, Scott D. Sullivan, has resumed talks with federal prosecutors that could lead to a possible guilty plea to charges that he engaged in accounting fraud at the telecommunications concern, according to people familiar with the matter. MR. SULLIVAN, who was indicted in August in connection with WorldCom’s escalating accounting scandal, is considering striking a deal and cooperating with the government’s investigation in the hopes of getting a more-lenient sentence, these people said. The ex-WorldCom official was charged with seven felony counts, including securities fraud, and faces a maximum of 65 years in prison. Mr. Sullivan has pleaded not guilty to the charges. WorldCom, which is operating under bankruptcy-court protection, has said it inflated profit by at least $9 billion over the past three years. Mr. Sullivan and prosecutors were in talks about a possible plea deal before his indictment in August. But, those discussions broke down over the amount of prison time the government wanted to include in an agreement, according to people close to the matter. But pressure has been building on Mr. Sullivan in recent weeks to strike a deal as several of his subordinates have pleaded guilty and agreed to cooperate with the government’s investigation. Four former WorldCom executives, including David F. Myers — the controller who reported directly to Mr. Sullivan — have pleaded guilty to charges in connection with their roles in the accounting improprieties. They are expected to be key witnesses in the government’s case against Mr. Sullivan if it goes to trial. The stakes are somewhat higher for Mr. Sullivan, who is accused by the government of having orchestrated the company’s accounting fraud beginning in October 2000. Lower-level executives, who say they were ordered to manipulate the company’s books, are facing substantial prison time as part of their plea deals. Mr. Myers, for example, pleaded guilty to three felony charges and faces a maximum of 20 years in prison. A judge can reduce that time, however. Given the number of charges against him and his alleged role in the accounting fraud, Mr. Sullivan would have to plead guilty to a greater number of felony counts than his subordinates, which may mean a harsher sentence, according to people familiar with the matter. If the amount of prison time is too stiff, Mr. Sullivan, may still opt to take his chances with a trial, said people close to the matter. Prosecutors in the U.S. attorney’s office in Manhattan are eager to gain Mr. Sullivan’s cooperation because they think he may be able to link the company’s former chief executive, Bernard J. Ebbers, to the accounting fraud, people familiar with the matter said. The government, which has been looking at whether to indict Mr. Ebbers, has so far been unable to bring charges against the former WorldCom chief executive. Mr. Sullivan was Mr. Ebbers’s closest confidant at the telecom concern and prosecutors hope to determine what the chief executive knew about the accounting fraud. Mr. Ebbers’s attorney, Reid Weingarten, declined to comment. Mr. Sullivan, who is free on $10 million bail, has told WorldCom executives and others that the accounting treatment he used was proper and that he doesn’t believe he did anything wrong. Copyright © 2002 Dow Jones & Company, Inc. All Rights Reserved.